TCS, HCLTech, Infosys' Ratings Cut: Jefferies Says 'P(AI)n Not Over Yet', Downgrades Six IT Stocks

Jefferies has downgraded ratings for six major IT stocks, including TCS, HCLTech, and Infosys, citing ongoing challenges in the sector due to the rising influence of artificial intelligence. The financial services firm emphasized that the transition to AI-driven services is expected to change the revenue dynamics, favoring consulting and implementation roles over traditional software development. Jefferies has identified Coforge, Sagility, and IKS Health as its top picks in the current market scenario, indicating a strategic shift towards companies that are better positioned to capitalize on these emerging trends. This move comes amidst a broader industry assessment that highlights the need for IT firms to adapt to the evolving technological landscape, as AI continues to reshape service offerings and client expectations. Investors are advised to closely monitor these developments, as the effects of AI integration become more pronounced in financial performance and market positioning.