- Wipro shares fell as much as 7.9%, diverging from other IT stocks on Friday
- Broadcom's AI chip revenue forecast missed estimates, sparking a tech selloff
- Tech Mahindra, Coforge, TCS, Infosys rose while HCL slipped slightly on Friday
Wipro Ltd. fell as much as 7.9% on Friday, diverging from gains in most information technology stocks, after a sharp selloff in Broadcom Inc. renewed concerns about artificial intelligence-related spending and pressure on technology services companies.
The stock dropped to Rs 188.15 in early trade before trimming losses. It was last trading 4.4% lower. In contrast, Tech Mahindra rose 1.82% and Coforge gained 1.47%, while Tata Consultancy Services, Infosys and Mphasis also traded higher. HCL Technologies slipped 0.05%.
The decline came after Broadcom shares fell as much as 15% in the U.S. on Thursday, their steepest intraday drop since January 2025, after the chipmaker's outlook for AI semiconductor revenue missed analyst expectations.
AI Spending Focus
Broadcom forecast AI semiconductor revenue of $16 billion for the fiscal third quarter through July, below analysts' estimates of $17.2 billion. Chief Executive Officer Hock Tan said the company expects to sell $56 billion worth of AI chips in the fiscal year ending October, also missing market expectations.
The weaker-than-expected outlook overshadowed Broadcom's total revenue forecast of $29.4 billion for the July quarter, which exceeded Wall Street estimates of $28.6 billion.
The disappointment spread across the semiconductor sector. Advanced Micro Devices and Micron Technology fell nearly 7% and 10%, respectively. Qualcomm dropped 5%, while Intel declined more than 4%. Nvidia fell before recovering some of its losses.
The selloff has renewed investor scrutiny of the pace of AI-related spending across the technology sector, including companies that have positioned AI as a key growth area.
Wipro In Spotlight
Wipro has increasingly highlighted AI, cloud and data services as areas of investment and growth. During its April earnings call, the company said cloud, data and AI continued to attract client spending and disclosed a new engagement with a global semiconductor company to support product development and manufacturing through engineering services.
The company also announced a dedicated AI-native business and platforms unit aimed at expanding AI-led offerings.
Investor caution towards Wipro comes at a time when the company has guided for sequential revenue growth of between minus 2% and 0% for the June quarter and flagged delays in the ramp-up of some large contracts.
The latest selloff marks a reversal from the rally that followed comments from Nvidia Chief Executive Officer Jensen Huang, who said it was the "best time" to be a software company and sought to ease concerns about the impact of AI on the sector.
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