Infosys hits 5-year low: Should investors buy the dip or wait?

Technical analysts are not convinced the worst is over. While Infosys chairman Nandan Nilekani laid out a long-term AI growth case and said the company is already working with 90% of its top 200 clients on AI initiatives, market experts tracking the stock’s charts and derivatives positioning say the near-term setup remains weak. Their reading: the stock may still need to stabilise and reclaim key levels before the dip becomes attractive for fresh buying.

Infosys sees $400 bn AI opportunity by 2030

Infosys made the case for AI at its 45th AGM. According to the Infosys management, AI is opening a large new addressable market for technology services companies rather than threatening them. Chairman Nandan Nilekani told shareholders the company sees an AI-first services opportunity of up to $400 billion by 2030 and argued that the real opportunity lies in helping enterprises deploy AI at scale.

“More than three years after GenAI was launched, Infosys is more relevant than ever before and well-positioned for the decade ahead. While we embrace the best coding tools and improve our productivity, there is much more to do in the software development life cycle,” Nilekani said.

Nilekani sought to address a concern that has weighed on IT stocks globally: whether generative AI could reduce the need for large software services firms. His answer was that enterprise adoption is far more complex than simply plugging in AI tools, and that this complexity keeps service providers like Infosys in the loop.

“The AI deployment gap in large enterprise clients is real, and closing that gap is where the work is. AI will not replace companies like ours. It will amplify those who move with purpose and adapt with speed,” he said.

He also pointed to the heavy lifting required before AI can be rolled out across large organisations, including testing, resilient architecture, cybersecurity and data governance. According to Nilekani, the next big opportunity will come from combining AI systems with the core enterprise platforms that still run day-to-day business operations.

“The defining opportunity lies in integrating intelligent AI systems with mission-critical enterprise platforms. The greatest value will come from combining the world of models and agents with traditional transaction systems that continue to underpin enterprise operations. That convergence is where the next wave of opportunities will emerge,” Nilekani said.

Infosys has already started to lean into that opportunity. “Our clients trust Infosys to bring hard-earned learning to help them navigate the complexities of enterprise AI. Infosys is fully prepared to deliver on that trust and help our clients navigate the next,” Nilekani said, adding that the company is already working with 90% of its top 200 clients on their AI programmes.

The stock has had a bruising run

The challenge for Infosys is that the market is not yet rewarding that longer-term AI narrative. On June 25, Infosys was trading around Rs 1,052, down sharply from its 52-week high of Rs 1,728 touched on February 3, 2026, and only marginally above its 52-week low of Rs 1,026 hit on June 23. The stock has been one of the weaker large-cap IT names in recent months.

Exchange data shows the stock is down 6.65% over one week and 9.93% over one month. The longer-term picture is even more severe: Infosys has fallen 35.42% on a year-to-date basis and 34.83% over one year, compared with a 7.45% drop in the Nifty 50 year to date and a 4.15% decline over one year. Over three years, the stock is down 16.80%, while the benchmark index has risen 29.64%. Over five years, Infosys has fallen 33.14% against a 52.57% gain in the Nifty 50.

That underperformance has become the central question after the AGM: is the selloff overdone, or is the market still pricing in more earnings and demand stress for the IT sector?

Why analysts are not rushing to call a bottom

Sudeep Shah, Head – Technical and Derivatives Research at SBI Securities, said the charts do not support a confident ‘buy-on-dips’ call yet .

“Infosys has slipped below its previous 52-week low of 1,030.35 and closed at 1,029.30. If the stock sustains itself below this level, the next major support zone is placed around 970–960, which had also acted as a strong demand area from where the stock witnessed a significant rebound in September 2020,” Shah said.

He said the volume pattern is adding to the caution. “From a volume perspective, the trend remains concerning. Since the sharp gap-down witnessed on February 12, 2026, the stock has repeatedly seen spikes in trading volumes, with some of these volume expansions being the highest recorded in the last two years. A decline in price accompanied by rising volumes typically reflects aggressive selling pressure and reinforces the strength of the prevailing downtrend. This suggests that downside risks remain elevated and the stock could continue to face pressure in the near term.”

Shah said the stock is still trading below every major moving average that traders track, a sign that sellers remain in control. “Infosys is currently trading well below its key moving averages, including the 20-day, 50-day, 100-day and 200-day moving averages, highlighting the strength of the prevailing bearish trend. Momentum indicators also continue to favour the bears. The RSI is trending lower and remains below 40 on both the daily and weekly timeframes, indicating persistent bearish momentum. In the ADX indicator, DI- remains comfortably above DI+, reflecting stronger seller dominance. The MACD line is trading below both the signal line and the zero line, further reinforcing the negative bias.”

His view is that the stock needs to prove that selling pressure is fading before the correction can be treated as a buying opportunity. “For signs of trend exhaustion or a potential reversal, investors should look for the stock to reclaim key short-term moving averages, witness an improvement in RSI, and see bullish crossovers emerge in indicators such as MACD and ADX. Until then, the broader technical structure remains weak. Despite the positive commentary around AI-led opportunities and long-term growth initiatives at the AGM, the stock chart is yet to reflect any meaningful shift in sentiment.”

Shah also pointed to the wider sector backdrop. “While intermittent pullbacks or short-covering rallies cannot be ruled out, the broader technical setup remains decisively weak. Additionally, the Nifty IT Index continues to remain in the Lagging Quadrant of the Relative Rotation Graph, indicating weak relative strength and momentum compared to the broader market.”

Resistance zones remain heavy as derivatives data stays cautious

Rahul Sharma, Executive Director & Head – Technical & Derivative Research at JM Financial Services, struck a similar note and said the breakdown has pushed Infosys into an important zone for the post-pandemic cycle.

“With Infosys slipping below the Rs 1,050 mark and breaking below previous major swing lows, the stock has entered uncharted territory for the post-pandemic cycle. On the downside, the next major psychological and technical support sits squarely at the Rs 1,000 mark. If selling pressure penetrates this level, structural support derived from historical pre-2021 consolidation zones lies around Rs 940–960,” Sharma said.

Sharma said the selling pattern does not look like a routine correction. “The volume trend is the primary red flag for bulls. The breakdown was triggered by Accenture’s lowered guidance on June 19, which saw massive delivery-based selling with over 4.5 crore shares traded. Subsequent sessions on June 22 and 23 continued to see elevated volumes between 1 crore and 2 crore shares. This heavy, expanding volume on down days indicates institutional distribution and capitulation rather than light-volume retail panic. Until the daily volume tapers off significantly, the downside risk remains aggressively skewed.”

He acknowledged that the stock is approaching oversold territory and that short-term rebounds are possible, but said that is not the same as a durable bottom. “Trading below the 5-day, 20-day, 50-day, 100-day and 200-day moving averages confirms a deep primary and secondary downtrend. However, with the 14-period RSI currently hovering near deeply oversold levels at around 31, technical relief rallies are highly probable.”

Sharma said traders should watch for a specific set of reversal signals before treating the fall as a buying chance. “For a credible reversal or a structural weakening of the downtrend, a few technical setups need to emerge. One is a bullish divergence on the daily MACD or RSI, where the price prints a lower low, such as dipping toward Rs 1,000, but the oscillator forms a higher low, signalling exhaustion in selling pressure.”

He added that price action will matter as much as momentum indicators. “Another signal would be capitulation candlesticks such as a long-legged Doji, Hammer, or Bullish Engulfing pattern on the daily timeframe, accompanied by above-average volume, indicating that smart money is absorbing institutional supply. The first structural sign of a bottom would be consecutive closes above the immediate 5-day EMA, followed by a breakout past the immediate lower-high sequence near Rs 1,070–1,080.”

AGM optimism has not yet changed the market’s mood

Sharma said management’s messaging at the AGM was strong on long-term AI demand, but that has not altered the near-term reading of the stock.

“At the 45th AGM, management strongly positioned AI as an ‘amplifier’ rather than a threat, highlighting a $1 billion annualised revenue run rate in AI services and targeting a $300–400 billion industry opportunity by 2030,” Sharma added. .

Yet, in his assessment, the street is not ready to price in that story. “Despite this confident long-term commentary, the technical structure remains decisively weak. The market is currently dismissing the multi-year AI narrative and heavily discounting near-term macro realities, specifically choppy discretionary client spending and potential AI deflation, where automation productivity gains shrink billable hours. Because management declined to comment on the ongoing share price decline, the market’s focus remained locked on near-term execution risks. Consequently, the charts show no visible momentum or sentiment shift post-AGM.”

Shah at SBI Securities came to a similar conclusion from the charts. “As long as Infosys trades below the 1,110–1,120 resistance zone, the overall trend is likely to remain bearish. The derivatives data suggests that market participants remain cautious on the stock. For the July series, the highest Call Open Interest is concentrated at the 1,050 strike, followed by the 1,060 strike, making this zone a significant resistance area. On the downside, the highest Put Open Interest is concentrated at the 1,020 strike, providing immediate support.”

He added that the current positioning points to a narrow range unless a stronger trigger emerges. “Based on the current options positioning, the stock is likely to trade within the 1,020–1,060 range unless a meaningful build-up or unwinding of positions triggers a breakout.”

Infosys: Is this the time to buy the dip?

As per the analysts financialexpress.com spoke to, the short answer from the technical side is no, not yet, at least not for those looking for confirmation that the worst of the downtrend is over.

SBI’s Shah said there are still no reliable signs of accumulation near current levels. “As far as accumulation is concerned, there are currently no clear signs of institutional accumulation or base formation despite the stock hovering near its 52-week low. Although short-term pullbacks remain possible, a durable trend reversal is unlikely unless the stock reclaims key moving averages and the Nifty IT index improves its relative strength by moving out of the Lagging Quadrant on the RRG framework. Until then, the technical evidence continues to favour further consolidation or weakness rather than a sustained recovery.”

JMFL’s Sharma also had a cautious approach. “The options data heading into the July series paints a heavily bearish picture. The put-call ratio is notably depressed, tracking near 0.47 for near-term expiries, reflecting aggressive and confident call writing.”

He said the options market is effectively capping upside for now. “Massive open interest concentrations have built up at the 1,100 and 1,130 call strikes. Any technical short-covering bounce will likely face severe supply in the 1,080–1,100 zone. On the downside, put writers have retreated from higher levels and are now anchoring primarily at the 1,000 psychological strike.”

That leaves the stock boxed into a range where rallies may still run into selling. “This derivatives setup brackets a capped trading range of Rs 1,000 to Rs 1,100 ahead of the Q1 FY27 earnings, with the path of least resistance still leaning downwards unless the Rs 1,080 resistance is reclaimed with conviction,” Sharma said.

He also said the stock has not yet shown the kind of volume behaviour that usually accompanies a durable bottom. “Despite minor intraday bounces witnessed near the 52-week lows, there are currently no definitive signs of smart-money accumulation. True accumulation is characterised by a contraction in volatility and a specific volume signature, where volume dries up on down days and expands on up days.”

“Currently, the Money Flow Index and volume spread analysis show that sellers are still dominating the chart. The stock is simply reacting to oversold conditions, a dead-cat bounce, rather than building a structural base. A meaningful bottom will require a multi-week consolidation phase, such as a sideways channel or a double-bottom pattern, to allow the rapidly declining moving averages to flatten out before a sustained reversal can be confirmed,” Sharma added.

Conclusion

Infosys has given the market a long-term story built around AI-led demand, enterprise modernisation and a larger role in helping clients deploy AI at scale. That was the central message at its AGM, and Nilekani’s comments made it clear the company sees AI as a growth driver, not a threat to its business model.

But for now the market is focused on weak price action, heavy selling volumes, pressure on the IT pack and the absence of technical evidence that a base has formed.Based on the signals tracked by both SBI Securities and JM Financial, buyers may need to wait for the stock to reclaim key resistance levels and show firmer signs of accumulation before calling the bottom.

Disclaimer: The technical indicators, option chain concentrations, and volume data outlined in this report regarding Infosys are for informational and educational purposes only. They do not constitute financial advice, an offer, or a solicitation to buy, sell, or hold equity shares. Technical analysis patterns, chart formations, and derivatives tracking are subject to rapid shifts based on market sentiment and institutional flow variables. Readers are strongly advised to conduct independent evaluation and consult a SEBI-registered technical analyst or qualified financial advisor before making trading or investment decisions based on these chart levels.

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