Nifty IT Surges Nearly 3% as Nvidia’s Blockbuster Earnings Reignite AI Optimism

Indian information technology stocks staged a sharp rally, with the Nifty IT index jumping close to 3% in a single session, as a stellar earnings report from US chipmaker Nvidia sent a wave of renewed confidence rippling through global technology markets. The rally lifted heavyweight names including Tata Consultancy Services, Tech Mahindra, HCL Technologies, and Infosys, turning the IT pack into the standout performer among sectoral indices for the day.

Shares of LTM Ltd, Coforge, TCS, Infosys, Oracle Financial Services Software, Persistent Systems, HCL Technologies, Tech Mahindra, Wipro and Mphasis were trading higher, with gains of up to 5.18 per cent. The broad-based nature of the move underscored just how closely Indian IT sentiment continues to track developments in the global semiconductor and artificial intelligence space, even though most of these companies operate in services rather than chipmaking.

The trigger was unmistakable. A blockbuster outlook from Nvidia spurred gains in technology stocks, bolstering confidence in the artificial-intelligence trade that has powered the bull market, with the nearly 9% surge in the chipmaker being the biggest since April 2025, adding US$442 billion to its market value after the company said revenue will grow about 70% in the next fiscal year. For a market that had grown increasingly nervous about whether AI-related spending could be nearing a peak, the numbers offered a powerful reassurance.

Market commentators in India were quick to connect the dots. Analysts noted that Nvidia’s second-quarter earnings exceeded expectations and reassured investors about the durability of the artificial intelligence boom, with results that crushed estimates and reinforced confidence in the sustainability of AI-driven spending. Others pointed out that the IT sector emerged as a key outperformer supported by the global technology backdrop and renewed optimism around AI, with positive global sentiment lifting sentiment across the sector.

Digging into Nvidia’s own numbers explains why the reaction was so strong. The company reported quarterly revenue of $96.2 billion for the second quarter, more than double the year-earlier level, with profit of $2.22 per share excluding certain items, while its data-centre business remained the biggest growth driver, with revenue rising 117% year-on-year to $89 billion, compared with an average estimate of $85.8 billion. Guidance for the years ahead was equally striking, as the 2028 revenue growth outlook was particularly notable, with analysts having projected growth of about 45% for that year.

For Indian IT companies, the read-through is more nuanced than a simple correlation. The read-through is important for Indian markets, particularly the IT sector, given that Indian IT stocks have rallied sharply in recent months as investors looked for relatively attractive valuations while parts of the global semiconductor market corrected. In effect, some of the money that had rotated out of expensive AI hardware names and into steadier, reasonably valued IT services stocks could, in theory, flow back the other way if the AI infrastructure theme reasserts itself. Nvidia’s strong results and bullish outlook could revive demand for AI hardware and infrastructure stocks, creating a potential rotation risk for Indian IT services.

That said, near term sentiment clearly favours the domestic IT pack. Traders and analysts have been watching how the sector reacts not just to Nvidia-linked cues but also to broader macro triggers, including commentary from the US Federal Reserve, movements in Asian markets, and order-win momentum for individual companies. The Nifty IT index’s outsized move relative to the broader Nifty 50 highlights how sensitive the sector remains to shifts in the global AI narrative, even though Indian IT firms are primarily service providers rather than direct beneficiaries of chip demand.

Whether this rally has legs will likely depend on upcoming earnings commentary from Indian IT majors, deal pipelines, and how global capital continues to be allocated between AI infrastructure plays and IT services stocks. For now, though, Nvidia’s results have handed the sector a much-needed shot of optimism, reminding investors of just how interconnected India’s technology exporters have become with the fortunes of Silicon Valley’s biggest AI bet.