TCS, Infosys, other IT stocks drop up to 3% as Anthropic IPO sparks rally
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Indian IT stocks fell amid reports that Anthropic, the maker of Claude, is preparing for an IPO that could value it at around $1.5 trillion. While the listing would open up investment opportunities in a leading AI developer, rising infrastructure costs, mounting losses and concerns over growth sustainability remain key risks.
Information technology stocks, including Tata Consultancy Services, Infosys, Wipro, HCLTech and Tech Mahindra, fell up to 3% on Tuesday amid reports that Anthropic, the maker of Claude, is preparing for an initial public offering that could value the company at around $1.5 trillion.Anthropic has filed for an IPO under the ticker ANT and is preparing to market its shares, though the number of shares on offer has yet to be determined. The listing would give public-market investors an opportunity to invest in one of the leading developers of AI models. However, the company's rapid growth has also brought mounting infrastructure costs, substantial losses and questions about the sustainability of its growth trajectory.
Overnight, Nvidia and Micro, two AI-linked stocks, closed 3% higher. South Korea's KOSPI index surged 5%, while SK Hynix rallied more than 8% and Samsung gained 5%. Both companies are among South Korea's biggest players in AI.
Anthropic IPO
Anthropic's financial disclosures have brought the scale of its growth and the costs of developing advanced AI models into sharper focus. The company told prospective IPO investors that revenue rose 45% sequentially to $16.8 billion in the third quarter, according to Reuters. It also reported adjusted profitability for the quarter.The figures highlight the pace at which demand for Anthropic's AI models is expanding, particularly among businesses using Claude for coding, automation and other enterprise applications.
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However, the company reported a net loss of about $42 billion in 2025, according to its IPO prospectus reviewed by Reuters. This included an accounting charge of approximately $34 billion, largely associated with changes in the estimated value of financing instruments that could eventually convert into shares. Excluding these liability-related write-downs, Anthropic's operating loss exceeded $8 billion.
The distinction is important because the headline net loss does not represent cash spent solely on day-to-day operations. Yet the operating loss remains substantial, reflecting the heavy spending required to develop advanced AI models, including investment in computing infrastructure, research and talent.
Valuation has also emerged as a key point of debate ahead of the listing. Some investors had previously discussed a valuation of around $2 trillion, but expectations have moderated following the latest financial disclosures and concerns about the pace of revenue growth.
Indian IT stocks face fresh pressure after October rally
The decline in Indian IT stocks comes after a sharp rally earlier this month, driven by strong second-quarter earnings. The sector has also faced selling pressure as investors question whether the returns from massive AI investments will be sustainable.Indian IT stocks have recovered about Rs 3.87 lakh crore in market value in October, while foreign investors have returned to the sector with purchases worth Rs 6,463 crore in the September quarter.
Foreign portfolio investors (FPIs) bought Rs 6,463 crore worth of IT stocks in the third quarter, according to NSDL data. The buying has been selective, with the latest shareholding data showing foreign investor ownership in Wipro rising from 8.85% in June to 9.46% in September. In Infosys, FII ownership increased from 27.09% to 27.44% over the same period.
Jefferies said the October rally has largely been driven by price-to-earnings (P/E) multiple expansion, rather than upgrades to revenue growth or earnings per share estimates for most IT companies.
"In our view, the PE rerating has been driven by improving sentiment on long-term growth outlook for IT firms because (1) Consensus US$ revenue growth expectations for FY28 have not seen material cuts after 2QFY27 results, unlike 4QFY26 and 1QFY27, (2) With IT firms still delivering growth despite weak macro and AI-deflation, investors are more willing to revisit their terminal growth assumptions," Jefferies analysts Akshat Agarwal and Ayush Bansal said.
The brokerage estimates that current stock prices imply organic constant-currency revenue growth of 0% to 9% for large IT companies over FY26-FY36, compared with 6% to 14% for mid-sized firms. For most companies, these implied growth rates are 2-4 percentage points below the growth recorded during FY16-FY26.
Risks remain for IT
HSBC said the FTSE India IT index is trading at 18 times forward earnings, below its five-year average of around 23 times. However, the lower valuation also reflects weaker growth prospects.Sector earnings growth has slowed from an already modest 4%-5% in recent years to around 2%-3%, largely due to AI-led deflation.
HSBC expects FY27 to be the most challenging year for the sector, followed by a recovery in FY28 and FY29. Even with that recovery, growth is expected to reach only the mid-single digits.
Axis Mutual Fund remains underweight on IT services, arguing that AI-related spending is still concentrated in infrastructure build-out rather than discretionary technology services. The fund house said traditional service lines remain under pressure, while AI could weigh on margins and growth before becoming a meaningful contributor to revenue.
Disclaimer: This article has been written by Veer Sharma, who is not a SEBI-registered Research Analyst or an Investment Adviser. Veer Sharma and his/her ‘relative(s)’ (as defined under Section 2(77) of the Companies Act, 2013) do not hold any financial interest in the companies mentioned in this article as of the date of publication. The views/recommendations mentioned in this article, wherever applicable, are those of the respective SEBI-registered Research Analyst/brokerage and have been reproduced/reported with due attribution. They should not be construed as the views or recommendations of The Economic Times Digital or the journalist. Readers are advised to consider the original research report and make their investment decisions based on their own assessment. Brokerage disclaimers here.
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Figures reflect the source report and its stated period. This article is for information and is not investment advice.
