Why IT Stocks Dropped Despite Market Gains Today

Information technology (IT) stocks dropped sharply on Friday, 10 April, even as the broader market opened on a positive note.

The Nifty IT index slipped more than 2%, while headline indices were up nearly 1% at 10:18 AM.

The fall came after Anthropic shared a preview of its new artificial intelligence (AI) model, Mythos. At the same time, Tata Consultancy Services (TCS) reported a slight dip in annual dollar revenue, which added to the weak mood.

What Triggered The Sell-Off In IT Stocks?

Losses were seen across most IT companies. Around 10:20 AM, Mphasis shares were down 3.24%. LTIMindtree, Infosys, and TCS dropped close to 3% each. Meanwhile, Tech Mahindra's stock was down 1.75%.

The pressure followed news around Mythos, a system built for cybersecurity and advanced code work. Instead of releasing it to everyone, Anthropic is testing it with a select set of partners. These include Amazon Web Services, Apple, Google, Microsoft, and NVIDIA.

What caught attention was how the model is being described. It can find gaps in systems, fix them, and even exploit them if asked to do so. This mix of power and risk made investors uneasy.

TCS Numbers Offer Mixed Signals

TCS results, announced a day earlier, also shaped sentiment. The company posted a 0.5% fall in full-year revenue in dollar terms, taking the total to $30.08 billion. This is the first time it has reported such a drop since listing.

On the other hand, the March quarter showed some improvement. Revenue rose 1.5% sequentially to $7.62 billion.

Net profit came in at ₹13,718 crore, up 12.2% from last year. Revenue from operations grew 9.6% to ₹70,698 crore.

The company pointed to strong deal activity, including large contracts with a combined value of $12 billion. Still, a steep fall in its India business weighed on the full-year numbers.

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How Could AI Change The IT Services Story?

The bigger concern for investors is what comes next. Tools such as Mythos show how quickly AI is moving into areas once handled mainly by people.

Earlier AI systems had already impacted coding tasks. Now, the focus is shifting to cybersecurity, which is a key service line for many IT firms. This raises questions about future demand.

That said, change may not happen overnight. Newer companies that run on cloud systems could adopt such tools faster. Older businesses, with complex setups, may take more time to adjust.

Sources:

Mint

MSN