Indian IT stocks surged on Friday, with the Nifty IT index gaining more than 3%, as investors brushed aside fresh uncertainty over the US government's move to bar eight technology companies from participating in a programme linked to employment-based green-card applications.
OpenAI's lower-than-estimated revenue run rate and Tata Consultancy Services' relatively firm second-quarter results also helped boost sentiment in the sector, which has been beaten down by worries about AI-related disruptions to its business model.
The Nifty IT index's rise on Friday was its biggest single-day gain since August 28. TCS shares rose 4.2%. HCL Technologies and Infosys gained around 3% each, while Wipro rose about 2.7% and Tech Mahindra advanced around 1.5%. "The rally in Indian IT stocks appears to reflect factors beyond TCS' Q2 results, which offered some reassurance on earnings resilience but no clear demand inflexion," said Kunal Bajaj, research analyst at Choice Institutional Equities. "We see the rally as reflecting earnings resilience and easing AI-disruption concerns more than a fundamental recovery."
According to news reports on Friday, OpenAI told investors that its annualised revenue run rate was nearly $50 billion in September, below the nearly $70 billion figure indicated in earlier reports. "OpenAI's lower-than-previously indicated revenue run-rate, largely reflecting differences in calculation and comparability rather than a clear demand slowdown, may also be easing concerns around AI-led disruption to traditional IT services and highlighting opportunities in enterprise AI implementation, integration and modernisation," said Bajaj. The IT index has declined nearly 8% from its August highs following a 17% rally since early July. The magnitude of Friday's rally in IT stocks came as a surprise, as market participants were expecting a sell-off in response to the US government decision to suspend IT firms from availing of the Permanent Labour Certification Programme, which allows skilled foreign workers to gain permanent residency. "One of the major reasons this news didn't have much impact at the Indian market open is because most Indian IT firms in the US, like Wipro, TCS and Infosys, due to tighter regulations and higher costs associated with H-1B visas, have hired fewer and fewer workers from outside the US," said Ravi Singh, chief research officer at Master Capital Services.
Bajaj added that the PERM suspension has had limited immediate impact as it affects the employment-based green-card pipeline, not existing H-1B work authorisation. The IT index is down 24.6% so far in 2026 compared with the 13.8% fall in the Nifty.
