TATA Consultancy Services (TCS), a leading company in the TATA Group, saw its shares plunge to a five-year low recently, hitting ₹2,585 during intraday trading. This represents a significant 44% decline from its all-time high of ₹4,592 achieved in August 2024. The continuous drop over two days is attributed to disruptions caused by the rise of artificial intelligence (AI) technologies, which are challenging the traditional business models of IT companies. This downturn has resulted in a market capitalization of ₹9.60 lakh crore, marking the lowest level seen in many years and pushing TCS down to being the sixth-largest company in India, down from fourth just three days prior.

The alarming fact is that TCS has provided zero returns over the past five years, with its stock prices hitting lows not seen since September 22, 2020, when it last closed at ₹2,523. This stark performance reflects the growing pressures on IT stocks following a significant sell-off in the U.S. market, where shares of key players like Infosys and Wipro dropped as much as 10% overnight. The competition is further exacerbated as new AI tools tailored for corporate legal teams are introduced by U.S.-based startups, directly challenging the operational foundations of established IT giants like TCS. As this trend continues, stakeholders are left wondering about the future trajectory of TCS's stock and whether it can recover from this downturn in a rapidly changing tech landscape.