TCS Share Prices Fall 44% From Peak, Hits 5-Year Low Amid AI Fears

Mumbai: Tata Consultancy Services (TCS) shares have fallen sharply and are now down about 44 percent from their peak of Rs 4,592 in August 2024. The stock hit around Rs 2,585, which is its lowest level in more than five years. The last time TCS closed near this level was in September 2020.

Because of this fall, TCS market value dropped to nearly Rs 9.60 lakh crore, also a multi-year low. The decline has changed the ranking of India’s biggest companies. Recently, State Bank of India (SBI) moved ahead of TCS to become the country’s fourth-largest listed company by market value.

AI Fear Triggers Selling

The latest fall happened as global investors became worried about Artificial Intelligence replacing some IT service work. Selling pressure increased after Infosys and Wipro ADRs fell sharply in the US market.

Investor fear increased after US AI startup Anthropic launched a new AI tool for corporate legal teams. The tool can help automate contract review, compliance checks, legal document preparation and other routine legal tasks.

Many investors worry that if AI can do such work faster and cheaper, companies may reduce spending on traditional IT services. This has created fear that profits and growth of IT services companies may slow down in the future.

Is AI a Real Threat to IT Services?

Some experts believe AI can change how IT companies work. Sectors like customer support, data processing and legal tech — once seen safe — now look exposed to automation.

But not everyone is negative. Some analysts say IT companies will still be needed to manage, run and maintain enterprise technology systems.

Brokerages See Opportunity

Global brokerage JPMorgan believes the sharp fall has created value buying chances. The firm says IT companies are still the “plumbers of the tech world”, meaning businesses still need them to run technology smoothly.

Dividend yields of major IT firms have reached levels last seen during major crises like the Global Financial Crisis and Covid-19 period.

JPMorgan suggests buying large IT companies like TCS and Infosys at current levels. It believes downside risk may now be limited, while any recovery in tech spending could push stocks higher.

What Investors Should Watch?

The next trigger will likely be global tech spending trends, AI adoption speed and corporate earnings. For now, markets remain nervous, but some experts believe panic selling may be overdone.

Disclaimer: This content is for informational purposes only and not investment advice. Stock market investments are subject to risks. Readers should consult certified financial advisors before making any investment decisions.