Infosys share price remained lower for the fourth straight session on Monday, February 16, closing with a modest decline of 0.26% at ₹1,365.90 apiece, taking its four-day cumulative losses to 9%.
The recent fall has driven Infosys share price 17% lower in February so far, marking its biggest monthly drop since April 2022, and has also contributed to a 26.60% decline from its one-year peak of ₹1,861 apiece, placing it among the worst performers in the large-cap space. The crash pushed its valuation below ₹6 lakh crore.
Investor sentiment toward the tech sector remained weak amid mounting concerns that artificial intelligence (AI) tools could enable enterprises to generate code in-house, reducing reliance on third-party vendors, with these concerns now spreading to financial services, transportation, and logistics.
While analysts do not see any near-term impact from the rise of artificial intelligence, Street concerns appear to stem from the view that it could soon pose tough competition for software makers, which intensified after Anthropic’s launch of a legal AI tool.
All tech stocks have been bleeding heavily since the start of February, erasing billions in market value and leaving significant pain in retail portfolios. This has also been heavily weighing on the key indices, causing them to erase all of their early 2026 gains.
Domestic fund houses take a sizeable hit
The recent crash in the Bengaluru-based software giant has also resulted in huge losses for domestic mutual funds.
At the end of the December quarter, 45 mutual funds collectively owned a 22.12% stake in Infosys, 2.07 percentage points higher than in the same period last year.
The 26.6% fall in the Infosys share price from its one-year high has resulted in a ₹44,421-crore notional loss for domestic fund houses. The value of their holdings has declined to ₹1,22,549 crore from ₹1,66,970 crore, when the stock was trading at ₹1,861.
Some of the key mutual funds holding stakes in the company include SBI Mutual Fund with a 4.66% stake, ICICI Prudential Mutual Fund, which owns 4.11%, and HDFC Mutual Fund and UTI Mutual Fund, holding 1.86% and 1.81%, respectively, at the end of Q2 FY26.
Apart from mutual funds, FIIs hold a majority 30.3% stake, while general shareholders own a 13.7% stake in the company, Trendlyne data showed.
Motilal Oswal sees AI as an opportunity, not existential threat
Motilal Oswal Financial Services said that while concerns around AI-led in-house code generation are rising, it believes the long-term structural role of IT services vendors remains intact.
The brokerage noted that although AI tools may enable enterprises to internally generate code, vendor ecosystems continue to play a critical role in systems integration, cybersecurity, performance optimisation, and downtime management.
It also highlighted that self-built software currently accounts for just 14% of total software spending, significantly lower than the 35–40% levels seen in the 1990s, suggesting enterprises still rely heavily on structured vendor support.
According to the brokerage, near-term earnings visibility for IT services remains stable, and in the medium term, AI could emerge as a revenue-accretive opportunity rather than a disruption.
While the long-term trajectory of the industry remains uncertain, the firm has kept its estimates unchanged as it awaits more evidence.
Disclaimer: We advise investors to check with certified experts before making any investment decisions.
