Shares of information technology (IT) companies were upbeat on May 2, mirroring the 1.52 per cent rally in the tech-heavy Nasdaq Composite index in the United States (US).
The Nifty IT index, which tracks the performance of India's top 10 IT stocks, gained 0.27 per cent today, led by gains in Persistent Systems and index heavyweights Infosys and HCL Technologies.
Persistent Systems gained 1.85 per cent, followed by Coforge, which rose 0.79 per cent. Wipro, HCL Technologies, and Infosys also ended the day in green, gaining between 0.13 per cent and 0.41 per cent. However, Tech Mahindra, Mphasis, Tata Consultancy Services (TCS), Oracle Financial Services Software, and LTIMindtree capped the gains.
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Why IT Stocks Gained Today
Big Tech's Strong Q1 Earnings: As per a Reuters report, Nasdaq rallied after "better-than-expected" earnings from Meta Platforms and Microsoft helped ease concerns about whether the massive spending on AI in recent years would actually pay off, especially at a time when US President Donald Trump is tampering with global trade policies.
Microsoft shares gained 7.6 per cent, led by positive quarterly growth projections for its cloud-computing business Azure. Meta's shares rose 4.2 per cent after posting a higher-than-expected revenue on account of better earnings from its advertising segment.
Cognizant Estimate-Beating Earnings: Meanwhile, positive Q1 earnings from Cognizant Technology Solutions, which reported a 21.4 per cent year-on-year (YoY) jump in net profit to $663 million, also added to IT stocks rally in India. Its net profit in the year-ago period was $546 million.
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The IT company's revenue for Q1 came in at $5,115 million, a jump of 7.5 per cent (or 8.2 per cent in constant currency terms) from $4,760 million in the previous year's corresponding quarter. The company said, it was above the high end of their guidance range.
For the full year 2025, Cognizant's management has guided for a revenue growth of 3.9 per cent to 6.4 per cent. On a constant currency basis, the growth is projected to be between 3.5 per cent and 6 per cent.
The company also projected its adjusted operating margin for the year to be in the range of 15.5 per cent to 15.7 per cent, which would mark an improvement of 20 to 40 basis points compared to the previous year. For Q2, Cognizant expects revenue growth between 5.9 per cent to 7.4 per cent, or 5 per cent to 6.5 per cent in constant currency.
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Cognizant's earnings reports and guidance are often seen as a leading indicator of the overall health of India's IT services sector since it derives most of its revenue from from US markets.
