Nifty IT climbs more than 9% in 3 sessions — Are IT stocks making a comeback?

Market expert Anil Singhvi on Tuesday said Indian IT stocks could witness fresh buying interest if the rally in global semiconductor and artificial intelligence (AI) stocks slows down, especially in markets such as South Korea and Taiwan.

Speaking about the recent trend in global markets, Singhvi said semiconductor and chip-related stocks have seen massive rallies over the past few months, but there are now early signs of weakness emerging in those markets.

According to him, this may lead foreign institutional investors (FIIs) to shift some money towards Indian IT companies.

Nifty IT Today

The Nifty IT index has recovered nearly 9.3 per cent from its 52-week low of 27,078 touched on May 14, 2026. The index was trading at 29,587.85 on Tuesday, gaining 1,198.05 points or 4.22 per cent during the session.

In comparison, the benchmark Nifty 50 rose 336.45 points or 1.44 per cent to 23,704.80. Despite the recent rebound over the past five days, the Nifty IT index continues to remain under pressure on a longer-term basis, declining 22.49 per cent year-to-date and over 21 per cent in the last year.

Stocks such as Coforge, Mphasis and Tech Mahindra led the recovery rally with gains of up to nearly 7 per cent on Tuesday.

Reverse Trade Emerging Between Semiconductors and IT

Singhvi said a “reverse trade” appears to be developing between semiconductor companies and Indian IT stocks.

He explained that the strong rally in AI and semiconductor companies globally had earlier hurt sentiment in Indian IT stocks. However, if the semiconductor trade weakens now, Indian IT companies could become attractive again for investors.

He noted that markets such as South Korea and Taiwan, which are heavily linked to semiconductor manufacturing, have shown signs of correction in recent sessions.

“Semiconductor and AI companies will continue to make money and perform well, but their valuation multiples may start cooling off,” Singhvi said.

He added that FIIs who made large gains in those markets may now begin partial profit booking, and some of that capital could move towards India.

Early Signs of FII Interest in Indian IT

Singhvi said there have already been early indications of foreign money returning to Indian IT stocks over the last few trading sessions. He pointed out that Indian IT shares gained strength recently, even without any major company-specific trigger.

According to him, this could be a sign that investors are slowly looking at the sector again as valuations in global semiconductor stocks appear stretched. He, however, clarified that this is still an early trend and not a confirmed market shift.

“These are initial signals and not a confirmed trend yet. Investors should continue monitoring global data closely,” Singhvi said.

Korea, Taiwan Markets Under Watch

The market expert said South Korean and Taiwanese markets have witnessed exceptionally strong rallies in recent months due to enthusiasm around semiconductors and AI-related businesses.

He added that excessive optimism in those markets could now lead to some correction. Singhvi compared the current sentiment in those markets with phases seen earlier in China and India, when investors became overly aggressive after sharp market rallies.

According to him, if FIIs start reducing exposure in semiconductor-heavy markets, India could benefit from fresh inflows. He said his team is closely tracking foreign investor activity and market data from Asian markets to understand whether this shift is beginning.

Which IT Stocks to Buy?

Brokerage firm Goldman Sachs has maintained a “Neutral” rating on Infosys with a target price of Rs 1,290 against the current market price (CMP) of Rs 1,190, implying a potential upside of about 8 per cent.

The brokerage said Infosys management highlighted a soft discretionary spending environment, although demand remained strong in the BFSI and EURS verticals along with healthy deal wins.

Goldman Sachs said some AI-led deflation may emerge in parts of the value chain, but Infosys expects this to be offset by new opportunities and expanding total addressable markets as enterprises adopt artificial intelligence solutions.

The company also sees scope for partnerships with frontier AI model companies.

Meanwhile, brokerage firm CLSA maintained a “Buy” rating on Coforge while trimming its target price to Rs 2,075 from Rs 2,095. With the stock trading at Rs 1,441, the revised target still indicates an upside potential of nearly 44 per cent.

CLSA said it continues to remain positive on the company’s execution, which was reflected in a better-than-expected FY27 margin guidance following the consolidation of Encora. The brokerage added that Coforge’s decision to exit a low-margin government project improved its free cash flow-to-profit conversion guidance.

CLSA also raised its FY27 and FY28 earnings estimates by 9 per cent and 5 per cent, respectively, while calling Coforge one of the top beneficiaries of the AI cycle due to its strong order book, improving revenue per employee and margin expansion.