Indian IT stocks rallied on Monday, October 5, as investors showed optimism about artificial intelligence. Shares of Persistent Systems, Mphasis, Wipro, and TCS rose as AI became a tailwind for the sector. Accenture CEO Julie Sweet said, "AI-related opportunities outweighing the impact of AI-driven efficiencies," as many enterprises use the technology.
The rally came amid growing optimism that artificial intelligence (AI) is emerging as a tailwind for the technology sector rather than an immediate threat to IT services demand.
Shares of Indian IT companies, including Persistent Systems, Mphasis, Wipro and Tata Consultancy Services (TCS), were among the top gainers in the IT index on Monday, October 5, rising 3.1%, 1.1%, 2.1% and 2.1%, respectively.
The rally came amid growing optimism that artificial intelligence (AI) is emerging as a tailwind for the technology sector rather than an immediate threat to IT services demand.
The trend is being linked to the Jevons paradox, which suggests that improvements in technological efficiency can ultimately drive higher demand as technology becomes more accessible and its use expands.
Accenture CEO Julie Sweet said the company continues to see AI-related opportunities outweighing the impact of AI-driven efficiencies on its business, as enterprises use the technology to expand what they can do.
The company's latest outlook also offered some reassurance to investors. Fourth-quarter revenue growth was around 7%, while full-year fiscal 2026 revenue growth stood at 5%, compared with its earlier guidance of 3-4%. Its fiscal 2027 revenue growth guidance of 3-6% was also seen as reassuring.
Deal momentum remained strong, with Accenture signing a record 141 bookings worth $100 million or more during the quarter. Total new bookings stood at $22.4 billion, up 4% year-on-year.
The company also reported a sizeable AI pipeline, with more than 400 clients initiating advanced AI projects during fiscal 2026. Nearly 100 of those clients began advanced AI work in the fourth quarter alone.
AI-led productivity gains also contributed to an increase in revenue per employee, which rose to $91,086 in FY26 from $89,439 a year earlier.
Meanwhile, Persistent Systems received a positive call from Kotak Institutional Equities, which double upgraded the stock to 'Buy' from 'Reduce'. The brokerage also raised its target price to ₹6,250 from ₹5,250, implying an upside of about 16.5% from the stock's reference price of ₹5,367.
Kotak said Persistent's stock has corrected from its recent peak even as organic business growth continues to accelerate. It also highlighted the company's solid execution track record since FY20 despite changing client spending patterns.
The brokerage expects the acquisition of Nagarro to provide Persistent with another leg of earnings growth.