Nifty IT index surges 2.5% amid global AI sell-off, strong Cognizant Q3 results; Coforge, Wipro lead gains

Coforge gained over 4%, Wipro and Persistent Systems about 3% and 2%, respectively, and Infosys more than 2%. Oracle Financial Services Software was the only stock in the red. Stocks in the information technology space traded higher after global IT services giant, Cognizant, reported stable results for the quarter-ended September. Its revenue grew 4.8% on year in constant currency to $5.66 billion.

This was largely in line with the Street's estimate of $5.65 billion. Bookings increased 4% to $28.7 billion, and these included three large deals with a total contract value of $100 million or more. South Korea's Kospi lost about 5% after Wall Street equities dipped overnight on AI jitters. Nasdaq lost over 1%, dragged by Alphabet after it revealed a hefty AI-related cash burn in its quarterly earnings.

Futures for the Nasdaq 100 Index slid 2% after earnings from Amazon.com Inc. and Intel Corp. raised fresh concerns about capital expenditure. Amazon slumped 7.3% in extended trading, while Intel plunged 23%. Bitcoin fell 0.5% to about $78,400 after Binance, the world’s largest crypto exchange, suspended all deposits and withdrawals as it investigated a suspected hack. After a three-day rally this week, technology stocks turned lower on Thursday as Alphabet Inc.’s shares posted a record drop following its results announcement.

Traders sold off Samsung Electronics Co.’s stock after the company’s earnings missed estimates and it delayed the release of its shareholder return plan. The latest earnings have deepened doubts over the AI trade, raising questions about whether heavy spending can generate returns quickly enough to justify lofty valuations. Even so, the damage has largely been confined to tech, with more than 400 S&P 500 Index members advancing Thursday as investors rotated into more defensive stocks and haven assets.

Teaneck-headquartered IT services firm Cognizant on October 29 reported third-quarter revenue of $5.66 billion, up 4.6% year-on-year, or 4.8% in constant currency, beating Wall Street estimates amid double-digit growth in its financial services business. Analysts had forecast revenue of $5.65 billion, representing year-on-year growth of 4.4%. Cognizant exceeded the estimate by approximately $14 million.

Revenue also came in above the midpoint of the company's guidance range for the quarter. Operating margin stood at 15.4%, down 60 basis points year-on-year, while adjusted operating margin expanded 30 basis points to 16.3%.