Foreign capital is flowing back into India’s software majors after a bruising 2025. Consequently, analysts report the first net fortnight of sector inflows since May last year. At the center of the revival sit Indian Tech Stocks, now hailed as pragmatic beneficiaries of global AI demand. Bloomberg data, cited by domestic outlets, shows overseas funds bought ₹45 billion of IT shares by 31 December. Meanwhile, corporate disclosures indicate that artificial-intelligence revenue is moving from pilot tests to production deals. Tata Consultancy Services announced an annualised AI services run-rate near $1.8 billion.

Furthermore, HCLTech posted 19.9% quarterly growth in its “advanced AI” line. Such numbers sharpen competitive positioning against Chinese and Korean peers that attracted last year’s flows. Nevertheless, valuation risks and divergent definitions of “AI revenue” keep seasoned managers cautious. This article unpacks the data, motives, and implications shaping renewed Foreign Investment and accelerating AI Growth in India. Professionals will also find guidance on upskilling through the linked certification.

AI Boosts Indian Tech Stocks

December data affirmed the shift. Bloomberg tallied ₹45 billion in foreign net purchases of IT shares during the final fortnight. Consequently, the Nifty IT index outperformed the broader market by three percentage points. Analysts link the outperformance to concrete AI Growth metrics rather than speculative trading. Moreover, TCS reported its AI run-rate climbing 17.3% quarter on quarter to $1.8 billion. HCLTech delivered similar momentum with $146 million in advanced AI revenue for the quarter. In contrast, most service peers in other emerging markets still talk only about pilot engagements. Therefore, portfolio managers seeking real cash flows rotated back into Indian Tech Stocks.

Subsequently, derivative positions in Nifty IT futures have widened, signaling confidence in sustained buying. Options data shows put-call ratios near bullish extremes for IT contracts. Nevertheless, analysts warn that thin holiday liquidity may exaggerate price action. AI monetisation finally shows through audited numbers. Consequently, the foreign bid is building momentum ahead of earnings season.

Foreign Flows Rebound Strong

India lost roughly $16 billion of Foreign Investment during 2025. However, that exodus appears to have paused. Depository figures show foreign portfolios flipped to buyers in late December. Subsequently, global bank strategists raised 2026 Sensex targets citing diversification benefits. HSBC called Indian equities a hedge against crowded AI hardware trades. Meanwhile, brokerage models attribute 60% of the fresh allocations to large-cap IT names. Therefore, Indian Tech Stocks again dominate watchlists across multi-asset desks.

Key Buying Flow Data

• ₹45 billion net IT purchases recorded in the fortnight ending 31 December.
• First sector buy signal from Foreign Investment since May 2025.
• Nifty IT weight stands at roughly 11% of the Nifty 50.
• Top five IT majors captured 80% of the inflows.

Collectively, these numbers confirm that smart money is moving early. Consequently, positioning could tighten liquidity for latecomers.

Furthermore, EPFR data indicates fresh inflows from European pension funds seeking EM diversification. These institutions favor high-liquidity names, magnifying moves in the largest exporters. Consequently, daily execution sizes on the NSE IT index have expanded by almost 30% versus October.

Corporate AI Revenue Surge

TCS has become the headline act. In mid-December, management revealed a $1.5 billion annualised AI services figure. Later results pushed that run-rate to $1.8 billion, marking 17.3% sequential expansion. Moreover, HCLTech showcased $146 million in quarterly advanced AI revenue, up 19.9%. Infosys, Wipro, and LTIMindtree are yet to publish comparable metrics. Nevertheless, deal commentaries suggest double-digit pipeline growth across automation and generative deployments. Consequently, consensus earnings models now embed higher AI Growth contributions for fiscal 2027. Broker notes project that AI could represent 7-10% of total sector sales within three years. However, definitions differ, so comparisons remain tricky.

As a safeguard, professionals are seeking independent skills validation. They can pursue the AI Executive™ certification to deepen governance and deployment expertise. Real revenue traction is emerging, yet measurement still lacks uniformity. Therefore, investors will scrutinize each disclosure during the next earnings cycle.

Investor Sentiment Shifts Up

Quotes from portfolio managers capture the changing mood. Aishvarya Dadheech observed that visibility feels stronger after December disclosures. In contrast, Karthick Jonagadla warned that operational misses still surprise analysts. Yet, both agree that consistent AI Growth could re-rate valuations. Consequently, call volumes on IT earnings calls have risen sharply, according to Refinitiv transcripts. Meanwhile, options open interest on Infosys implies elevated expectations into results week. Sentiment has improved, but skepticism lingers around margins and pricing. Hence, next quarter numbers will likely dictate the durability of the rally for Indian Tech Stocks.

Risks Temper Market Bullishness

Valuations already sit near one standard deviation above the five-year median. Moreover, India lacks domestic chip makers that profit directly from model training demand. Therefore, revenue multiples depend on services stickiness rather than hardware scarcity. Labor cost inflation and new labor codes also pressure margins. Additionally, some firms missed consensus estimates last quarter despite AI headlines. Rising wage costs could erode the very margins investors now prize. In addition, global clients are renegotiating fixed-price contracts to capture automation savings. Foreign Investment can reverse quickly if global yields spike or geopolitical stress intensifies. In contrast, passive flows may soften volatility due to index rebalancing. Nevertheless, seasoned managers advise monitoring daily NSDL prints for abrupt changes. Comparability issues around disclosed “AI revenue” remain another red flag for auditors. Consequently, risk-adjusted allocation sizes stay moderate across many global funds.

Risks highlight that not every AI headline converts to sustainable profit. Yet, disciplined entry points can still reward believers in Indian Tech Stocks.

Strategic Takeaways For Professionals

Industry practitioners can translate the current narrative into concrete actions. Firstly, dissect each company’s AI revenue definition before adjusting valuation models. Secondly, track fortnightly NSDL flow tables for signs of sticky Foreign Investment. Thirdly, evaluate how big-tech cloud spending filters into order books. Moreover, consider currency hedges, because rupee weakness can magnify upside for export heavyweights.

• TCS AI run-rate reaches $1.8 billion annualised, growing 17.3% quarter over quarter.
• HCLTech advanced AI revenue hits $146 million, rising 19.9% QoQ.
• Microsoft pledges $17.5 billion for Indian cloud and AI infrastructure.
• Amazon reinvests $35 billion into AWS India expansion through 2030.

Additionally, enhance personal credibility through recognized credentials. Professionals may pursue the AI Executive™ certification to master governance, ethics, and deployment frameworks. Consequently, decision makers can engage clients with evidence-based AI Growth strategies. Finally, maintain diversified exposure within and beyond Indian Tech Stocks to control concentration risk. Strategic discipline and continuous learning can convert macro themes into portfolio alpha. Therefore, staying informed empowers participants to navigate volatility surrounding Indian Tech Stocks.

India’s software exporters are translating AI hype into measurable revenue. Consequently, overseas allocators are rebuilding positions despite lingering risks. Corporate numbers, stronger foreign inflows, and supportive policy signals underpin the rebound. However, investors must scrutinize disclosures, monitor flows, and respect valuation caps. Professionals should diversify exposure, upgrade skills, and follow evolving standards. They can start by earning the AI Executive™ certification highlighted above. Ultimately, disciplined engagement with Indian Tech Stocks may unlock upside during the global AI cycle. Nevertheless, timing entries into Indian Tech Stocks remains essential as sentiment can reverse quickly. Forward indicators, such as staffing intention surveys, hint at moderate hiring upticks from April. Consequently, operational leverage could support earnings even without massive currency gains.