IT stocks in focus: US PERM visa curb, OpenAI revenue setback, TCS Q2; 3 factors to watch

The US administration has suspended several technology companies, including Infosys, TCS, Wipro, HCL Technologies and Cognizant, from the Permanent Labour Certification Programme (PERM), a key step in the US employment-based green card process. The action raises fresh questions about the operating environment for Indian IT services companies with significant US operations.

Separately, a report that OpenAI’s annualised revenue was approaching $50 billion at the end of September, below the previously reported figure of nearly $70 billion, has raised concerns about the commercial returns from artificial intelligence (AI). TCS’ latest results provide another measure of technology spending, with the company reporting modest sequential revenue growth alongside sizeable contract wins.

Here are three factors to watch for IT stocks, including Infosys, TCS, Wipro, HCLTech, Tech Mahindra and LTIMindtree.

1. US visa curbs: Infosys, TCS, Wipro and HCLTech in focus

The US administration’s decision to suspend major technology companies from the PERM programme is the most immediate policy development for Indian IT stocks. Vice-President JD Vance announced the action on October 8, accusing Microsoft of replacing American workers with foreign employees. The Labour Department said it would stop accepting new applications and processing pending permanent labour certification applications involving the affected companies.

The companies named in reports on the action include Microsoft, Adobe, Cognizant, Infosys, Tata, Wipro, HCL Technologies and Capgemini. The restrictions concern the permanent residency certification process and should not be interpreted as a blanket ban on H-1B visas.

The development adds to existing US restrictions on certain H-1B petitions involving workers outside the country, including a $100,000 payment requirement subject to specified exceptions. The White House extended the relevant restrictions for another 12 months in September 2026.

For Indian IT services companies, the immediate concern is whether the restrictions affect employee retention, permanent residency applications and the ability to deploy experienced personnel in the US. Any prolonged disruption could increase uncertainty around staffing arrangements, although the financial impact will depend on the number of affected employees and the duration of the restrictions.

In response to the above-mentioned announcement by the US Government, TCS issued a statement: “We have noted the announcement by the US Government on the Permanent Labor Certification Program (PERM) and TCS will comply with any directive from the Department of Labor. Our workforce strategy in the US is anchored in hiring local talent, supported by a robust campus recruitment model.”

The tech major added that “we have built a significant local workforce across 31 offices and delivery centers throughout the country. As we had announced earlier, we intend to hire an additional 15,000 people in the US over the next five years, to further augment our local workforce.”

The key stocks to watch on the back of this news include Infosys, TCS, Wipro and HCLTech, alongside Cognizant’s global operations and other IT services companies with substantial US exposure. Markets will also assess whether companies can manage the situation through local hiring, offshore delivery and changes in employee deployment.

2. OpenAI revenue setback: Will AI spending concerns weigh on technology stocks?

OpenAI’s reported revenue figures have brought the economics of the AI boom under scrutiny. According to a Financial Times report cited by Reuters on October 8, OpenAI told investors that its annualised revenue was approaching $50 billion at the end of September, below the nearly $70 billion figure reported earlier.

The difference reportedly arose from attempts to compare OpenAI’s revenue with Anthropic’s figures. Anthropic includes sales made through cloud partners such as Amazon Web Services and Google Cloud in its annualised revenue calculations, while OpenAI does not count those sales in the same way. The discrepancy therefore does not establish that OpenAI’s underlying revenue has declined.

The report nevertheless unsettled US technology stocks, particularly companies linked to AI infrastructure and chip demand. The concern is whether the enormous spending on AI computing capacity and related infrastructure will generate sufficient revenue to justify the investment.

For Indian IT services companies, the implications are less direct. TCS, Infosys, HCLTech, Wipro and Tech Mahindra are expanding their AI offerings, but the financial benefit depends on enterprise clients moving from pilot projects to paid deployments at scale.

Markets will watch whether companies report stronger AI-led deal wins, higher revenue from AI services and improved client spending on cloud migration and digital transformation. If businesses become more cautious about AI budgets, projects could take longer to convert into revenue. However, a change in how OpenAI calculates its annualised revenue is not, by itself, evidence of weaker demand for AI services across the industry.

3. TCS results: Revenue growth and AI deal wins under scrutiny

TCS reported September-quarter revenue of $7.642 billion, up 2.4% year-on-year in US dollar terms and 0.2% sequentially. Revenue increased 0.5% sequentially in constant currency terms, while operating margin stood at 24% and net profit was $1.45 billion.

The company reported total contract value of $9.6 billion for the quarter, while annualised AI revenue reached $3.1 billion, crossing 10% of revenue. Banking, financial services and insurance, manufacturing, and technology and services contributed to sequential growth in constant currency terms.

The results offer a fresh reading of enterprise technology demand, although the modest sequential revenue increase leaves the pace of recovery in focus. Markets will assess whether TCS can convert its contract wins into stronger revenue growth over the coming quarters, particularly as clients continue to scrutinise discretionary technology spending.

TCS also announced a five-year strategic partnership with Porsche AG and an agreement to transition Best Buy’s global capability centre in India to TCS, with plans to develop it into an AI capability centre. These agreements add to its business pipeline, but their contribution to revenue will depend on execution and the timing of project ramp-ups.

The results are relevant beyond TCS because management commentary on client budgets, deal conversion and AI demand can influence expectations for the wider sector. Infosys, HCLTech, Wipro, Tech Mahindra and LTIMindtree will also remain on the radar as markets assess whether growth is improving across the industry or remains uneven.

Tech Sector: What investors need to watch

Indian technology stocks face three separate tests: the implications of US restrictions on employment-based immigration, the commercial returns from AI investments and the ability of large IT services companies to turn new contracts into sustained revenue growth.

The immediate focus will be on the impact of the PERM suspensions on affected companies and whether the OpenAI report changes expectations for global AI spending. TCS’ results provide a useful reference point for assessing enterprise demand, but one company’s performance will not determine the outlook for the entire sector.

The next set of company updates on deal wins, revenue conversion, employee deployment and AI-led business will help establish whether Indian IT services companies can deliver stronger growth amid policy uncertainty and questions over the returns from AI spending.