IT Stocks Rally Today: TCS Results Trigger Fresh Buying Across The Sector

IT stocks rallied on Friday, October 9, 2026, with the Nifty IT index rising around 3.3 per cent Intraday as investors responded positively to TCS' September-quarter results and looked past fresh US restrictions on employment-based green-card processing. TCS shares rose as much as 5.4 per cent, while other major IT names including Infosys, Wipro, HCLTech and Tech Mahindra also traded higher.

TCS Results Set The Tone

TCS became the first major Indian IT company to report Q2 FY27 results, giving investors an early indication of the sector's demand environment. The company reported a 15 per cent year-on-year rise in net profit to Rs 13,884 crore, while revenue increased 11.2 per cent to Rs 73,188 crore.

More importantly for the market, TCS maintained its operating margin at 24 per cent despite continued investment in artificial intelligence. Its annualised AI revenue rose to USD 3.1 billion, crossing 10 per cent of total revenue, while total contract value stood at USD 9.6 billion. 

The results have helped ease some of the concerns that had weighed on IT stocks in recent months, particularly around AI-driven changes to traditional technology services.

US Green-Card Restrictions Fail To Derail The Rally

The IT sector is also dealing with a fresh development in the US. The US government has suspended several technology companies, including TCS, Infosys, Wipro, HCLTech and Cognizant, from the Permanent Labour Certification (PERM) programme.

PERM is an important step for employers seeking employment-based green cards for foreign workers. The US Department of Labor said it would stop accepting and processing new and pending applications involving the affected companies. 

Despite this, investors have not treated the move as an immediate earnings threat. TCS said its PERM applications had been in the single digits over the past two years and that the suspension was not expected to materially affect its workforce strategy or client engagements. The company also reiterated plans to hire 15,000 people in the US over the next five years, with local hiring forming a major part of its strategy. 

IT Stocks Get Relief After Heavy Selling

The rally also comes after a difficult period for technology stocks. The Nifty IT index had fallen sharply in 2026 amid concerns over AI disruption, weak discretionary technology spending and uncertainty around US immigration policies. The index was down about 26 per cent for the year, according to reports on Friday. 

That steep correction has left investors more willing to respond to positive developments. TCS' results, particularly the stable margin and strong AI revenue, provided the sector with a reason to recover.

The broader market also bounced back after Thursday's heavy sell-off. The Nifty 50 and Sensex were both higher in Friday's morning trade, adding to the positive tone across sectors. 

What Investors Will Watch Next

The focus now shifts to the upcoming results from other major IT companies. Their revenue growth, deal wins, margins and commentary on AI spending will determine whether Friday's move develops into a broader sector recovery or remains a relief rally.

For now, TCS has given the IT sector a much-needed positive trigger. The US immigration issue remains a risk, but investors appear to be focusing more on actual business performance and the industry's growing exposure to AI-led technology spending.

Disclaimer: The article is for informational purposes only and not investment advice.