AI Stocks Take a Dive: Should You Invest?
The Nifty IT index has recently experienced a sharp decline, raising concerns among investors about the impact of AI on traditional IT services. This decline has wiped out significant market value from major tech companies, leading to broad sell-offs in the sector. Despite the growing interest in AI technologies, stocks of several companies have not escaped this volatility.
Among them, Happiest Minds has seen its stock drop by over 46% from its 52-week high, trading at around ₹395.80. The company reported a revenue of ₹587.60 crore for Q3 FY26, showing a slight increase from the previous year. However, net profit fell to ₹40.30 crore. Happiest Minds is focusing on generative AI and has developed several projects, including a sales assistant for a retailer in Australia, which showcases their commitment to innovation.
Similarly, Saksoft, an IT services provider, has seen its stock decline by 36%, currently trading around ₹163. The company reported a revenue of ₹250.80 crore in Q2 FY26, showing modest growth. Saksoft is enhancing its digital partnerships and has secured a multi-year engagement focused on AI adoption in logistics. The company aims to achieve $500 million in revenue by 2030, reflecting its ambitious growth strategy.
On the other hand, TCS, India's largest IT services firm, has experienced a 31% drop in stock value, trading at ₹2,729. The company continues to focus on AI, generating an annual revenue of $1.8 billion from its AI services. Despite a significant drop in net profit due to exceptional charges, TCS is investing heavily in AI technologies that can streamline operations across various sectors. Over a third of its workforce is now trained in advanced AI methodologies, showcasing its commitment to becoming a leader in the AI space.
As these companies navigate the challenges posed by AI disruption, it's crucial for investors to assess the fundamentals, corporate governance, and stock valuations before making any investment decisions. The current market landscape presents both challenges and opportunities, making thorough research imperative. Happy investing!
