The Bengaluru-based IT giant’s AI Investor Day, intended to shore up confidence in its long-term positioning, did little to stem the sell-off gripping Indian IT stocks amid fears of AI-driven disruption. Yet brokerages are largely holding firm, with price targets ranging from Rs 1,760 to Rs 2,050, implying upside of up to 52% from current levels.
JPMorgan is the most bullish on the Street, maintaining an Overweight rating with a target price of Rs 2,050. The bank highlighted three key takeaways: AI is driving an enterprise tech pivot from “buy” to “build,” which is services-accretive; a significant opportunity lies in addressing tech debt brought to the fore by AI transitions; and greenfield technology deployment is far simpler than real-world enterprise brownfield implementation.
“Infosys laid out its six-sided AI new services opportunity that is already at 5.5% of revenues in 3Q26, addressing a $300-400bn AI services spend led by Process AI and Agentic legacy modernisation,” JPMorgan noted.
Motilal Oswal, with a Buy and target of Rs 1,850, implying 33% upside, flagged that Infosys continues to expand its partnership ecosystem across AI-native firms, including tie-ups with Cognition, Cursor, and Anthropic, which could strengthen solution breadth and support go-to-market execution as enterprise AI adoption scales.
“We see limited evidence for earnings cuts and believe cyclical recovery in core businesses is underway,” the brokerage said, though it cautioned that “concerns around terminal value and AI-led disruption may restrict near-term multiple re-rating.”
Bank of America (BofA), which maintains a Buy rating with a target price of Rs 1,840, struck a measured note. “Enterprise AI isn’t plug and play,” it said, adding that the key risk with AI, as per the company itself, “is less about opportunity and more about strategy and execution.” The bank pointed out that revenue from AI-first offerings, at 5.5%, is “not too different from peers that have disclosed the metric.”Nuvama Institutional Equities was more direct in assessing the market reaction, stating that the recent sharp correction in IT stocks was overdone, as fears of disruption from GenAI have been highly exaggerated. While maintaining a Buy rating with a target of Rs 1,900, it acknowledged that “revenue compression due to AI-driven productivity will be front-loaded, while the benefits will accrue over the medium term.”
At the heart of the Investor Day was management’s argument that AI, far from being a headwind, is a structural tailwind for services firms. Infosys contended that, unlike past technology cycles, when enterprises layered new technologies atop legacy systems, AI implementation requires legacy modernisation, creating durable services demand. The company outlined six opportunity areas: AI Strategy and Engineering, Data for AI, Process AI, Agentic Legacy Modernisation, Physical AI, and AI Trust.
Client traction data offered some support for the bull case. Infosys said 90% of its top 200 large clients are already using its AI services, with AI contributing approximately 5.5% of revenue in Q3FY26. The company has positioned itself as a strategic AI partner for 15 of its top 25 clients in the Financial Services and Energy, Utilities & Resources verticals, with some engagements delivering up to a 40% reduction in effort.
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Underpinning the strategy is Infosys Topaz Fabric, its proprietary AI platform offering more than 600 out-of-the-box agents that integrate with clients’ existing technology landscapes, alongside a revamped talent model designed to embed an AI-first mindset across the organisation.
HSBC, which maintains a Buy rating and a target price of Rs 1,870, identified Infosys’ long-standing client relationships, enterprise context, and accountability as key competitive strengths in the race to become a preferred AI partner. UBS, also with a target of Rs 1,870, flagged that while the AI opportunity is expanding rapidly, “organisations are not ready.”
CLSA was relatively more cautious, with an Outperform rating and a target of Rs 1,779, noting that Infosys’ 5.5% AI revenue share implies close to 1.5% of the global GenAI services market. Morgan Stanley has one of the lowest target prices at Rs 1,760 with an Equal Weight rating, though it acknowledged that management had “dismissed concerns around opportunity risk” and quantified AI’s contribution to revenues.
The broader tension the market is grappling with is one articulated plainly by Nuvama Institutional Equities: the benefits of AI for IT services companies will take time to materialise, while deflationary pressures on legacy revenues are immediate. For now, that gap appears to be what the stock’s decline is pricing in, regardless of what the next decade may hold.
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