Infosys, TCS, other IT stocks to remain in focus after tech rally following strong Nvidia earnings

Company Performance - Nvidia reported a 73% year-on-year rise in quarterly revenue to $68.1 billion for Q4 of fiscal year 2026, marking the highest-ever quarterly revenue for the company and exceeding analysts' expectations of $65.8 billion [1][10] - The company anticipates next quarter revenue could reach $78 billion [1] - Nvidia's gross profit margin was around 75%, and it generated $34.9 billion in free cash flow [2][10] - The diluted EPS increased by 98% year-on-year to $1.76 during the quarter [2][10] Market Reaction - Following Nvidia's results, US stock markets rose, with the Nasdaq Composite gaining approximately 1.3%, the Dow Jones Industrial Average increasing by 0.63%, and the S&P 500 rising by 0.81% [6][10] - The S&P Software & Services index saw a jump of 2.9%, while Nvidia shares increased by around 3% [6][10] Industry Insights - Nvidia's CEO Jensen Huang highlighted the exponential growth in computing demand and the significant rise in enterprise adoption of AI technologies, indicating a pivotal moment for AI [5][10] - Indian IT stocks have experienced volatility, with the Nifty IT index dropping 21% this month, influenced by new AI tools from Anthropic that raised concerns about potential disruptions in the sector [7][10] - Research Analyst Sushovon Nayak from Anand Rathi Institutional Equities believes the AI technology cycle is in its early monetization phase, with Indian IT likely to benefit from increased AI spending [8][10] - Nayak suggests that investors should consider gradually accumulating select IT stocks, especially during price declines of 5-7%, as the recent weakness may be nearing a bottom [9][10]