IT stocks in focus after Oracle’s strong results; Nuvama says valuations now attractive after correction

Group 1: Oracle's Financial Performance - Oracle reported total revenue of $17.19 billion for Q3 of fiscal year 2026, surpassing analysts' expectations of $16.91 billion [1] - The company raised its revenue forecast for fiscal 2027 to $90 billion [1] Group 2: Market Impact and Investor Sentiment - Oracle's strong earnings positively influenced Wall Street, with the Nasdaq Composite gaining 0.01%, while the Dow Jones Industrial Average fell 0.07% and the S&P 500 dropped 0.21% [3] - Investors are closely analyzing Oracle's earnings for insights into the broader AI and cloud computing economy, as Oracle positions itself against competitors like Amazon Web Services and Microsoft Azure [2] Group 3: IT Services Industry Outlook - Nuvama remains bullish on IT stocks, suggesting that a 20% correction since the beginning of the year has made valuations attractive [6] - The Indian IT services industry faces disruption from Gen AI, but Nuvama believes there is no existential threat and that the need for system integrators will persist [8][9] - Nuvama anticipates that the adoption of Gen AI will follow a technology adoption curve, leading to initial revenue cannibalization for IT services firms [9] - The total addressable market (TAM) for IT services is expected to expand to USD 300 to USD 400 billion by 2030, with a shift from headcount-driven to outcome-based revenue models [10] - Nuvama has a 'Buy' call on all top ten IT services stocks, upgrading several companies including HCLTech, Wipro, and Tech Mahindra [12]