Trip Chowdhry: AI Bubble Bursting Hits Indian IT Companies Hard Amid Valuation Concerns
Trip Chowdhry highlights unsustainable AI business models at firms impacting Indian IT amid recent stock declines.
Market Strategist Trip Chowdhry has warned that the global Artificial Intelligence (AI) boom may be losing momentum, arguing that the much-hyped AI rally is showing signs of a bubble bursting and leaving Indian Information Technology (IT) companies “stuck” amid shifting investor expectations. His comments come at a time when technology stocks, particularly IT services firms, are facing heightened volatility in global markets.
Chowdhry, Managing Director at Global Equities Research, said the intense enthusiasm around AI has led to inflated valuations that are increasingly difficult to justify with near-term revenues and profitability. According to him, while AI remains a transformative technology, investor sentiment has run ahead of fundamentals, creating a disconnect that is now beginning to correct. This reassessment, he suggested, is weighing on tech-heavy indices worldwide.
Indian IT companies have been particularly affected by this shift in sentiment. Chowdhry noted that many large IT services firms are struggling to clearly articulate how AI will translate into sustained earnings growth in the short to medium term. Concerns have also emerged that rapid advances in AI-driven automation could reduce demand for traditional outsourcing and software services, a core strength of India’s IT sector.
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The comments come amid a broader sell-off in IT stocks, triggered by fears that global enterprises may rely more on AI tools to cut costs and streamline operations. This has raised questions about pricing power, deal pipelines, and long-term growth visibility for Indian IT majors, even as they continue to invest heavily in AI capabilities and reskilling their workforce.
Despite the cautionary tone, analysts say a cooling of the AI frenzy does not diminish the technology’s long-term importance. Instead, it may mark a phase of market rationalisation, where companies with clear use cases, strong execution, and sustainable business models stand out. For Indian IT firms, the challenge now lies in proving that AI adoption can enhance revenues rather than disrupt their core business.
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