Will AI fears continue to shake IT stock valuations? Expert answers

Concerns about artificial intelligence (AI) and its effect on IT companies have been hanging over the market for a while. Investors have watched technology stocks struggle, but experts say the situation may not be as bleak as it seems.

Sneha Poddar of Motilal Oswal Financial Services (MOFSL) said the market has long been aware of AI risks. “There’s no denying that the threat is there, but this was already known to the market,” she says, adding that the real impact on IT services will become clearer over the next year.

She expects fresh AI-focused deals to emerge in the next three to six months as companies finalise budgets. “Those short-cycle deals will be a key monitor,” she says. Despite challenges, Poddar believes IT firms will remain essential for AI rollouts and that valuations now limit further downside.

Sharing her view on Hindustan Unilever, Poddar sounded optimistic about the company’s direction. “The commentary which has come out from the management seems quite positive, and we are bullish with regard to FY27 growth,” she says. While margins may face near-term pressure, she expects efficiency gains and the impact of GST to support a gradual improvement in growth.

(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)