Infosys fell 2.31% to Rs 1,139.05 on Tuesday, 27 October, the worst performer on the NSE IT index, and Tata Consultancy Services (TCS) fell 2.09%, Business Today reported. All 10 stocks in the index traded lower, after Anthropic’s IPO filing and Meta’s announcement that it was seeking $95 billion through equity offerings, according to the report.
The same two companies now report about a tenth of their revenue from AI. Infosys said on 23 October that its AI revenue was 10.5% of revenue and grew 29% quarter on quarter. TCS said on 8 October that its annualized AI revenue reached $3.1 billion, crossing 10% of revenue.
Explainer · INDIAN IT AND THE AI TRADE
A short Business Engineer explainer on this story, narrated from the published text of this piece and our 13 October piece on TCS and HCLTech.
The key insight: As we read it, the two numbers point in opposite directions: Infosys says AI revenue rose from 8.2% of revenue in Q1 to 10.5% in Q2, while it cut its FY27 revenuegrowth guidance from 1.5%-3.0% to 1%-2% in the same three months.
Business Today reported that Infosys, TCS and Wipro had recently gained on hopes of a global shift away from AI stocks, and that Tuesday’s fall raised “fears that hopes of a ‘reverse AI’ trade may be premature.”
After Infosys and TCS, Coforge fell 1.66% and Persistent Systems 1.54%, while Wipro, Mphasis, HCL Technologies and Tech Mahindra each fell more than 1%, the report said. It added that Infosys was particularly down as at least four brokerages cut their ratings on the stock in a single day. Bloomberg reported that Infosys was downgraded by at least four analysts in a single day after it cut its annual sales forecast, deepening concerns over disruption from artificial intelligence.
Nandish Shah, Deputy Vice President at HDFC Securities, told Business Today that the AI theme “received a fresh boost after Anthropic filed for an initial public offering on the Nasdaq.” He said the iShares Semiconductor ETF rose nearly 3%, with Nvidia up 2.4%, Micron 3%, Broadcom 2.3% and AMD 2.8%. Shah also noted that South Korea’s Kospi and Japan’s Nikkei 225 were trading with gains of 2% and 4%.
One-day moves cited by Business Today on 27 October 2026: US chip stocks in the last US session (as cited by HDFC Securities’ Nandish Shah) and Indian IT stocks on the NSE IT index on 27 October (intraday). Different sessions.Size of one-day moves cited by Business Today on 27 October 2026: Micron and Nvidia rose in the last US session, as cited by HDFC Securities’ Nandish Shah; TCS and Infosys fell on 27 October, intraday on the NSE.
Update, 27 Oct: the hiring side. The Financial Times published “India’s outsourcers defy AI threat” the same morning. A post on X summarising it says that, according to the FT, India’s 24 listed IT services firms have added more than 31,000 employees since April, twice the jobs they added in the whole previous fiscal year. We could not read the FT article itself, so the figure is as relayed in that post.
What the Companies Report
Infosys reported Q2 revenue of $5,145 million on 23 October, year-on-year growth of 1.5% in constant currency. In the same release it revised its FY27 revenuegrowth guidance to 1%-2%, down from the 1.5%-3.0% it gave on 23 July, and kept its margin guidance at 20%-22%. In July, Infosys put AI revenues at 8.2% of revenue in Q1.
“Our AI revenue was at 10.5% and grew 29% quarter-on-quarter,” Infosys CEO Salil Parekh said in the release.
TCS reported Q2 revenue of $7,642 million on 8 October, up 2.4% year on year in US dollars. Its release put annualized AI revenue at US$3.1 billion. Aarthi Subramanian, President and Chief Operating Officer, said: “AI momentum remained strong, with annualized AI revenues now exceeding $3 billion.”
Why the Market Treats Them as the Other Side
Business Today wrote that Indian IT stocks have been under pressure this calendar year amid global AI investment, as IT spending shifts towards AI infrastructure, tokens, AI-enabled software, cybersecurity, data readiness and modernisation, while traditional maintenance, support and other effort-based services face pricing pressure.
The report said there are hopes that high borrowing costs will end the investment phase and start a phase of maintenance and support, but that Wall Street demand suggests otherwise.
Connecting the Coverage
Our piece on TCS and HCLTech reported on 13 October that both Indian IT firms now list an AI revenue figure among their quarterly highlights, next to total revenue growing in low single digits. A day earlier, HCLTech announced a dedicated Anthropic Business Unit to deploy Claude, which we covered as HCLTech’s Anthropic partnership.
The two events Business Today linked to Tuesday’s move were both reported here on 26 October: Anthropic’s S-1, which shows $16.29 billion of revenue for the first half of 2026, and Meta’s $35 billion stock sale and planned at-the-market program.
The Structural Read
As we read it, the AI slice and the total are growing at different speeds: Infosys’s Q2 revenue grew 1.5% year on year in constant currency, and TCS’s grew 2.4% in US dollars, while each reports AI at about a tenth of revenue.
As we read it, Business Today’s description of the pressure is about pricing: traditional maintenance, support and other effort-based services face pricing pressure as IT spending shifts towards AI infrastructure and AI-enabled software.
As we read it, the ‘reverse AI’ trade was tested across two sessions: US chip stocks rose in the US session after Anthropic’s filing, as Shah cited them, and every stock in the NSE IT index fell on Tuesday, per Business Today.
Salil Parekh, Infosys CEO, 23 October 2026
“Our AI revenue was at 10.5% and grew 29% quarter-on-quarter.”
Three Implications
FOR INDIAN IT INVESTORS Infosys’s own releases show AI revenue rising to 10.5% of revenue while its FY27 revenue guidance was cut to 1%-2%, so the AI line and the total are moving at different speeds.
FOR THE ‘REVERSE AI’ TRADE Business Today reported that Indian IT stocks had gained on hopes of a shift away from AI stocks, and that Tuesday’s fall raised fears those hopes may be premature.
FOR COMPARISONS BETWEEN FIRMS TCS reports an annualized AI run-rate and Infosys a share of quarterly revenue, so the two figures are not measured the same way.
The framework sums up the transition in one line: “SaaS is charged for access to tools. AGaaS charges for the execution of outcomes.”
As we read it, Business Today’s account of pricing pressure on effort-based services fits that shift. The framework was published in March 2026 and does not discuss Infosys, TCS or these figures.
What Is Not Established
Neither Business Today nor Bloomberg’s post names the analysts who cut Infosys, and the share of Infosys’s fall due to those downgrades, to its guidance cut or to the AI rally is not known. The Indian moves are intraday figures from Tuesday morning and may differ at the close, and the US chip moves Shah cited come from an earlier session.
TCS reports an annualized run-rate and Infosys a share of quarterly revenue, so the two AI figures are not measured the same way, and neither company defines in these releases which services count as AI revenue.
This Week In The AI Supercycle
Execution Fault Lines, Concentrated Demand, and Geopolitical Firewalls
This week’s issue: the AI build is not short of demand for its parts. It is short of cheap money, and its end revenue rests on a narrow base of large, often venture-funded buyers.
Infosys and TCS each report about a tenth of their revenue from AI, and Infosys says its AI revenue grew 29% in a quarter. On the morning after Anthropic’s filing, both stocks fell more than 2% while US chip stocks rose, the move Business Today described as a setback for the ‘reverse AI’ trade.
A note on sourcing. This piece is based on the Business Today report of 27 October 2026, Infosys’s Q2 FY27 release (23 October 2026, filed with the SEC on Form 6-K) TCS’s Q2 FY27 release (8 October 2026) and Infosys’s Q1 FY27 release (23 July 2026), read in full on 27 October 2026, and Bloomberg’s X post of 27 October 2026 on the Infosys downgrades, and on our own earlier reporting. Stock moves are as reported by Business Today. We did not contact Infosys, TCS or Anthropic.
Gennaro Cuofano is a CRO and tech executive who has worked in AI since late 2015, starting with bringing NLP, natural-language generation, voice and chatbot products to the marketing industry. His background is in law and finance: he holds a Master's degree in Law and an International MBA with an emphasis on corporate finance (LUISS Business School and the University of San Diego, 2012), and worked as a financial analyst at a real-estate investment firm in San Diego and as an assistant controller. His work focuses on business model strategy, business engineering and, more broadly, structural analysis: how companies make money, read from their own filings. He created FourWeekMBA and leads research there and at The Business Engineer, his newsletter on AI and business strategy, with over 95,000 subscribers and more than 1,000 published analyses. His writing has also appeared on Entrepreneur (for example, How to Digitize a Family Business in Europe) and HackerNoon. Find him on LinkedIn and Substack. See how we source.
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