Global investment in AI and cloud technology has increased rapidly, putting pressure on Indian IT companies. Big tech giants are doing data centers and automation themselves, reducing outsourcing and delaying projects.
Indian IT: The wave of Artificial Intelligence (AI) in the world has changed the direction of the tech industry. Demand for data centers is growing rapidly, the need for chips is skyrocketing and major cloud platforms are making record investments. But amid this boom, new challenges are also arising before Indian IT companies. The latest report from Antique Stock Broking presents the same picture.
Record increase in earnings of hyperscaler companies
According to the report, there has been a rise in the earnings of big cloud companies like Amazon Web Services (AWS), Microsoft and Google. AWS’s revenue was $35.6 billion, up 24% year-on-year. Microsoft’s Intelligent Cloud business had revenue of $32.9 billion, a growth of 29%, while Azure’s growth was 39%. Google Cloud showed the fastest growth and its revenue reached $17.7 billion, which is 48% more than last year. It is clear that the demand for AI has become a big engine for these companies.
Record investment in capex
Antique’s report also states that in 2026, these four big tech companies together can spend about $630 billion in capital expenditure. This is an increase of more than 60% from approximately $390 billion by 2025. Microsoft spent $37.5 billion in just one quarter. Amazon plans to invest around $200 billion in 2026, Alphabet $175-185 billion and Meta $115-135 billion. This means that spending on AI infrastructure will remain high for many years to come.
This may also affect Indian IT companies. Earlier these global companies used to outsource many technical tasks to Indian IT companies, but now they are creating their own data centers, AI platforms and automation systems. This has led to a slowdown in demand for IT services, delays in projects and decreasing intensity of outsourcing.
Long-term risks due to AI
The report warns that in the future, traditional IT work such as application development, testing, maintenance and infrastructure management may be affected due to AI. At present the situation is stable, but in the long term the possibility of change in the business model has increased.
Experts say that Indian IT companies will have to change their models and project portfolio to meet these new challenges. We will have to invest in new projects based on AI and automation to remain competitive in the global market.
Relief from strong order book
However, the whole picture is not negative. The order book of cloud companies remains strong. Google Cloud’s backlog has increased by 55% to $240 billion. This means that demand for AI is not just a current surge, but a long-term trend. This strong backlog may provide Indian IT companies at least some stability in current projects and outsourcing.
Brokerage’s new opinion on shares
In view of these circumstances, Antique Stock Broking has reduced the valuation of Indian IT companies by 5% to 10% and reduced the growth estimates slightly. The brokerage has maintained ‘hold’ advice on Infosys, Tech Mahindra and Wipro. At the same time, the rating of TCS and HCL Tech has been reduced from ‘Buy’ to ‘Hold’. This means investors should reduce their bullish expectations in these stocks for now, but it is still a promising sector for the long term.
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