Domestic technology stocks witnessed strong buying momentum in Monday’s trade on 01 June, even as the benchmark indices failed to hold on to their intraday gains. Sentiment towards the sector has started improving after months of weakness, as attractive valuations and the strong rally in US software stocks brought back much-needed optimism, helping Indian IT counters recover some of their recent losses.
All 10 constituents of the Nifty IT index ended in the green, with Persistent Systems leading the gains by surging 4%. It was followed by Tech Mahindra, Infosys, Larsen & Toubro, Coforge, and Oracle Financial Services, all of which rallied more than 2.5%.
Other major IT stocks, including Mphasis, Tata Consultancy Services, Wipro, and HCL Technologies, also ended higher with gains ranging between 1% and 1.7%. Tracking the rally in heavyweight IT counters, the Nifty IT index finished the session with a solid gain of 2.66% at 29,854.
US software earnings, easing AI disruption fears lift Indian IT stocks
Earlier in February, technology stocks witnessed a massive sell-off after fears emerged that advanced AI tools, especially from startups such as Anthropic and its Claude Code platform, could disrupt traditional software business models.
The concerns triggered a widespread sell-off not only in the US but also across key global markets, including India, erasing billions of dollars in market value and clouding the outlook for technology companies.
However, stronger-than-expected first-quarter earnings from major US software companies such as Salesforce, ServiceNow, Snowflake and Palantir Technologies reassured investors that demand for software services remains strong despite the rapid rise of AI adoption.
Salesforce’s revenue for the quarter ended April 30 rose 13% to $11.1 billion, supported by $444 million in sales linked to its November acquisition of Informatica. Adjusted profit stood at $3.88 per share, significantly ahead of analysts’ average estimate of $3.13 per share.
Snowflake, which helps companies organise, analyse, and store corporate data in the cloud, reported a 34% rise in product revenue to $1.33 billion for the fiscal first quarter ended April 30, surpassing analysts’ average estimate of $1.27 billion.
Remaining performance obligations, a key measure of bookings, stood at $9.21 billion, slightly below analysts’ expectations of $9.43 billion.
For the second quarter, Snowflake guided product revenue in the range of $1.415 billion to $1.420 billion, representing growth of around 30%. The company also raised its full-year FY27 product revenue guidance to $5.84 billion and increased its non-GAAP operating margin guidance to 13.5%, which sent the stock price 37% higher in Thursday’s trade.
Back home, Wipro announced an extension of its partnership with ServiceNow. The collaboration will focus on deploying agentic AI workflows across key enterprise functions, including information technology, human resources, procurement, and cybersecurity.
The development further revived confidence in technology stocks. In addition, Mphasis Limited gained traction after its analyst day, where the company said it is transitioning from a traditional services-led model to a platform-plus-outcome-based approach from FY27.
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