IT stocks rallied in early trade on Friday, lifted by strong buying across the board. The Nifty IT index surged 2.75% to surpass 31,000 level.
LTM, Coforge, Tech Mahindra and Tata Consultancy Services (TCS) were the top gainers on the Nifty IT index with over 3% rally each.
Infosys, HCL Technologies, Mphasis, Persistent Systems, Oracle Financial Services Software and Wipro shares also gained more than 2% each.
The rally in Indian IT stocks followed gains in global technology shares, after chip giant Nvidia posted stronger than expected earnings for the second quarter, and issued a bullish sales outlook, reinforcing expectations of sustained spending on AI infrastructure.
Overnight on Wall Street, the tech-heavy Nasdaq Composite closed 411.16 points, or 1.57%, higher at 26,541.35 on Wednesday. Nvidia stock price surged over 8%.
Nvidia reported better-than-expected second-quarter earnings and issued a bullish sales outlook, reinforcing expectations of sustained spending on AI infrastructure.
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Nvidia's Q2 revenue more than doubled year-on-year (YoY) to $96.22 billion, surpassing analysts' estimate of $92.17 billion, while earnings per share (EPS) was at $2.22.
The chipmaker also gave higher than estimated guidance for the third quarter. It expects its revenue in the third quarter of fiscal 2027 at $108 billion, plus or minus 2%, implying sequential growth of around 12%. The company expects gross margin at 74%, plus or minus 50 basis points, reflecting some moderation as newer platforms ramp up.
Analysts believe Nvidia's strong results suggest that hyperscalers and enterprises continue to spend aggressively on AI infrastructure, which could have positive implications for the deal pipeline of Indian IT services companies.
However, the impact on Indian IT companies is likely to be more gradual, while AI-led pricing pressure remains a key headwind for the sector.
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