Rising debt among US technology giants and concerns over returns from artificial intelligence (AI) investments are prompting investors to reassess the AI trade, creating an opportunity for Indian IT services companies.

The global sell-off in AI stocks is putting Indian IT services companies in focus, as investors question the returns from massive AI infrastructure investments and look for alternatives to expensive technology stocks.

Market rotation

The shift towards Indian IT services companies was visible in October’s market performance. According to Goldman Sachs Research, Indian IT services stocks outperformed the Nifty by 14 percentage points in October, while AI-enabler stocks underperformed the benchmark by 6 percentage points.

This…