HCLTech shares surged nearly 6% on Friday, emerging as the top gainer on the Nifty 50 after the company announced a massive $1.14 billion artificial intelligence (AI)-led transformation deal.
The rally also helped lift the broader Nifty IT index for the second straight session, even as AI-heavy markets in South Korea and Taiwan witnessed a sharp selloff.
At around 11 am, HCLTech was trading nearly 6% higher. Tech Mahindra gained around 3.9%, TCS rose over 3%, while Infosys advanced more than 1.4%. The Nifty IT index climbed over 2.5%, extending Thursday’s sharp rebound after snapping a four-session losing streak.
The contrasting moves highlight an interesting shift in investor sentiment. While semiconductor and AI hardware companies across Asia came under heavy selling pressure, Indian IT services firms attracted fresh buying.
The biggest trigger for HCLTech was its announcement of a strategic partnership with a Europe-headquartered Fortune Global 50 company.
The company said it will establish and manage an AI-driven operating model to transform the client’s global digital workplace and enterprise network services. The initial contract runs from July 2026 to December 2031 and is valued at around $1.14 billion, with an option to extend it by another five years. HCLTech described it as an entirely new business win.
Large deal wins have become an important indicator for investors as they signal that global enterprises continue to spend on AI-led digital transformation despite macroeconomic uncertainty.
The deal reassures investors that enterprises are not cutting AI spending. Instead, they are increasingly shifting from merely buying AI hardware to implementing AI across their businesses.
Unlike semiconductor manufacturers that depend on demand for expensive AI chips and infrastructure, Indian IT companies earn revenues by designing, implementing, integrating and managing AI solutions for clients.
This means firms such as HCLTech, TCS, Infosys and Tech Mahindra benefit when companies move from building AI infrastructure to actually deploying AI applications across operations.
That has led investors to believe Indian IT firms could emerge as long-term beneficiaries even if spending on AI hardware slows.
The rally in Indian IT stocks comes at a time when AI-focused
South Korea’s KOSPI plunged as much as 8% on Thursday, marking one of its sharpest declines in recent weeks, while Taiwan also fell, dragged lower by semiconductor stocks.
Samsung Electronics dropped more than 9%, while SK Hynix tumbled nearly 15%. Taiwan Semiconductor Manufacturing Company (TSMC) also declined as investors dumped AI-linked chipmakers.
According to Reuters, the selloff gathered pace after reports that Meta Platforms plans to sell access to its AI computing power and AI models. Investors interpreted this as a sign that the company may have built more AI infrastructure than it currently needs, raising fears of excess capacity across the industry.
Bloomberg also reported that Meta’s plans to commercialise its computing infrastructure have sparked fresh questions over whether the AI investment boom has gone too far. At the same time, reports that Apple is considering sourcing memory chips from Chinese manufacturers added to concerns about South Korean chipmakers losing some of their competitive advantage.
While AI hardware companies are facing concerns over valuations and possible overcapacity, Indian IT companies operate in a different part of the AI ecosystem.
Instead of manufacturing chips or building AI infrastructure, they provide software development, cloud migration, AI integration, consulting and managed services.
This distinction has become increasingly important for investors.
After the recent correction, valuations of Indian IT stocks had also become more attractive. The Nifty IT index had fallen about 6.5% over four sessions before rebounding on Thursday and extending gains on Friday.
The recovery suggests investors are differentiating between AI infrastructure companies and AI service providers.
Another factor supporting Indian IT stocks has been easing concerns over US interest rates.
Earlier this week, expectations that the US Federal Reserve could keep interest rates higher for longer had hurt Indian IT stocks because the sector earns a significant share of its revenues from North America.
However, a softer US labour market report has reduced fears of immediate rate hikes, improving sentiment toward technology stocks globally.
Lower interest rate expectations generally encourage businesses in the US to spend more on digital transformation projects, cloud migration and AI implementation—all of which benefit Indian IT exporters.
Despite the strong rebound, analysts believe the sustainability of the rally will depend on whether more large AI deals emerge during the upcoming earnings season.
Investors will closely monitor June-quarter results, management commentary on client spending, AI deal pipelines and discretionary technology budgets.
(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)