Why IT Stocks Are Falling Today: Anthropic AI Tool

If you opened your trading app today and saw IT stocks bleeding red, the reaction was probably confusion first, panic second. TCS, Infosys, Wipro and other IT heavyweights fell sharply, dragging the entire Nifty IT index down with them.

This fall was not because of poor earnings, weak guidance, or bad news from Indian companies themselves. The real trigger came from a new AI tool launched in the US that made investors rethink one big question. How much human work will companies actually need in the future?

To understand why the market reacted so strongly, we need to start with what exactly happened and then slowly connect the dots.

What Triggered the Market Reaction

In late January, a US-based AI company called Anthropic expanded its platform called Claude Cowork. Along with this expansion, it released 11 new plugins designed to perform real business work across different professions.

This announcement changed how investors look at AI. Until now, AI was seen as a helper. Something that made employees faster and software companies stronger. After this launch, the fear shifted to something bigger. What if AI starts doing the work itself?

Once this fear set in, global software stocks started falling. That fear then travelled to Indian IT stocks. On February 4, 2026, the Nifty IT index saw its worst single-day fall since March 2020. Nearly ₹2 lakh crore in market value was wiped out. Shares of TCS, Infosys, and Wipro fell between 5 percent and 8 percent in a single day.

To understand why one AI announcement caused such damage, we first need to clearly understand what this tool actually is.

What Is Claude Cowork, Explained Simply

The easiest way to understand Claude Cowork is to think of it as a digital employee. Earlier AI tools were like smart students. They could answer questions or write content, but only if you told them exactly what to do. You had to guide them at every step.

Claude Cowork is different. It behaves more like an experienced office worker who knows how to get things done. Instead of just giving answers, it takes action.  Instead of assisting, it completes tasks.

What Makes This Tool Different

First, it can work with files: Claude can open folders, read documents, find the right file, make changes, and organise everything properly.

Second, it uses plugins: Plugins are like specialised apps. Anthropic released 11 plugins that allow Claude to work like a lawyer, marketer, finance professional, data analyst, or researcher.

Third, it needs very little instruction: You do not need to explain every step. You can simply say, “Audit these 50 contracts and tell me which ones expire next month,” and it does the full task on its own.

This shift from AI that talks to AI that works is where the fear begins.

The Legal Plugin That Sparked the Sell-Off

Among the 11 plugins, the legal plugin caused the strongest reaction in the market. This plugin can automatically review contracts, sort NDAs, flag risks, and check compliance issues. These are tasks that usually require legal teams, legal software, or outsourced service providers.

As soon as investors realised this, legal technology companies were hit hard. Companies like Thomson Reuters and LegalZoom saw their stock prices fall by 15 to 20 percent.

This moment changed the investor narrative completely. Earlier, the belief was that AI would help software and IT companies grow faster. Now, the fear is that AI might replace them. This fear quickly spread beyond legal tech to the entire software industry.

How Global Tech Fear Reaches Indian IT Stocks

Indian IT companies earn most of their money by exporting services to global clients, especially in the US and Europe. They provide software development, testing, maintenance, and long-term support using large teams of engineers.

So when global companies start cutting costs or rethinking how much human work they need, Indian IT firms feel the impact almost immediately.

Global companies are cutting costs by using AI to reduce manpower, which lowers outsourced IT work. As a result, Indian IT firms lose billable hours and IT stocks come under pressure. This is why news from a US AI startup can shake Indian markets so deeply.

The Core Concern: Fewer Billable Hours

The biggest worry for investors is not today’s revenue. It is the future business model. Indian IT companies largely follow a labour-based model. They earn based on the number of people deployed and the time spent on projects. Claude’s ability to handle coding workflows, testing, and routine tasks raises a serious question.

If one engineer using AI can do the work of many people, why would clients pay for large teams? This creates pressure on margins, deal sizes, and long-term growth expectations. Even if the impact is not immediate, markets start pricing in this risk early.

Plugins and What They Mean ?

Anthropic released a total of 11 specialised plugins, each designed to handle real business work that was earlier done by people or dedicated software.

• The legal plugin focuses on contract reviews, compliance checks, and document screening.
• The finance plugin can handle tasks like journal entries, account reconciliations, and even help prepare financial statements.
• The data analysis plugin writes SQL queries, pulls data from databases, and turns it into clear dashboards. 
• The bio research plugin supports early-stage scientific research by connecting to lab data and research tools.

What makes these plugins important is not just what they do, but what they replace. Each one targets work that earlier required skilled professionals, expensive software tools, or large outsourced teams. This is why investors see them as a direct challenge to traditional software companies and service-led IT businesses.

Why the Market Reaction Was So Sharp

Stock markets are forward-looking. They respond quickly when assumptions about the future begin to change. This sharp fall does not mean Indian IT companies will suddenly stop growing. Instead, it reflects growing uncertainty around how resilient their existing business models are in a world where AI can now operate with very little human involvement.

Even without stretched valuations, IT stocks depend heavily on confidence in long-term cash flows from global clients. When a new technology raises doubts about the demand for outsourced services, billable hours, and pricing power, investors tend to reduce exposure early. The correction, therefore, is less about expensive stocks and more about rising questions on future growth visibility and earnings stability.

What This Means for You as an Investor

• Today’s fall is driven by uncertainty about the future, not because Indian IT companies are suddenly weak or unprofitable. Markets are reacting to what could change over the next few years, not what is happening today.
• Indian IT companies earn most of their revenue by exporting services that depend on large teams and billable hours. If AI tools reduce the need for human effort, clients may push for lower costs, which can pressure margins and slow revenue growth.
• Global tech companies are likely to adopt AI faster to cut costs. When their spending on outsourcing reduces, Indian IT firms feel the impact directly because of their heavy dependence on overseas clients.
• This shift increases the gap between companies that adapt to AI-led services and those that stay dependent on manpower-driven execution. Investors may start rewarding IT firms that move towards consulting, platform-based solutions, and higher-value work.
• The market is not reacting to the existence of AI. It is reacting to the possibility that AI has started doing the work that people and traditional software were paid to do.

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