India’s information technology sector is in focus. While companies continue to invest heavily in Artificial Intelligence (AI), uncertainty in the global economy and cautious spending by clients remain near-term challenges.
In the latest report, the brokerage house Nomura has maintained a positive stance on two major technology stocks – Tata Consultancy Services (TCS) and Wipro.
Nomura rating on TCS, Wipro
The brokerage house Nomura has retained a ‘Buy’ rating on Tata Consultancy Services (TCS). It has set a target price of Rs 2,930, implying an upside of about 33% from current levels.
Wipro has also received a ‘Buy’ rating, with the brokerage assigning a target price of Rs 250. This indicates a potential upside of around 26%.
So what is driving Nomura’s optimism on these two information technology giants?
Nomura on TCS: Betting on the AI opportunity
As per Nomura report, TCS management recently participated in the Nomura Investment Forum Asia 2026, where it outlined how Artificial Intelligence could create fresh growth opportunities for technology service providers.
One of the key messages from the company was that businesses cannot simply deploy AI models without support. According to management, enterprise technology systems remain highly complex, creating a significant role for system integrators and technology service providers.
TCS management stated that “AI budgets are in addition to spends on services and software at enterprises.”
The company also highlighted several areas where AI-related spending could generate business opportunities. The Nomura report added that these include helping clients move toward autonomous operations, preparing enterprise data infrastructure for AI adoption, strengthening cybersecurity capabilities, and supporting industry-specific applications such as drug discovery and insurance claim processing.
Management further said that “AI spends will create newer revenue opportunities for services companies like itself in the medium term.”
– Near-term challenges remain for TCS
TCS highlighted that demand conditions remain challenging in certain markets.
The brokerage house report added that the ongoing conflict in the Middle East continues to make clients cautious about technology spending decisions. The company noted that weakness seen during the final weeks of the Q4FY26 has extended into the current quarter.
Management stated that “Demand softness that TCS started seeing in the last few weeks of 4QFY26 due to the Middle East war has continued.”
Nomura has retained its positive outlook on the stock. The brokerage said, “We retain our Buy rating on the stock with an unchanged target price of Rs 2,930.”
Nomura on Wipro: Positioning for the next AI cycle
Wipro is also positioning itself to benefit from growing Artificial Intelligence adoption across enterprises.
According to Nomura report, Wipro believes that increasing commercialisation of AI models by companies such as OpenAI and Anthropic could eventually result in higher demand for technology implementation services.
Management noted that “Services spend on AI to pick up” as businesses move from experimentation to large-scale deployment. According to Wipro, technology service providers continue to play an important role in helping enterprises adopt complex technologies and bridge implementation challenges.
According to management, “The shift towards outcome-based models will continue in the AI world, delinking revenue and employee headcount growth.”
– Competition and margins in focus
While Wipro sees opportunities from AI adoption, management noted that the competitive environment remains intense.
According to the brokerage report, technology companies continue to compete aggressively for large outsourcing and cost-optimization contracts, particularly in a market where overall growth remains moderate.
Management said that “Competitive intensity remains high amongst the vendors, especially in large cost take-out projects.”
The company also indicated that salary hikes and the ramp-up of recently won large deals could create some pressure on margins in the near term. However, Wipro expects profitability to remain within a manageable range over the course of the year.
TCS vs Wipro: What investors need to watch
According to the brokerage report, both TCS and Wipro could benefit as companies invest in cloud computing, cybersecurity, data modernisation and AI deployment.
Disclaimer: The stock recommendations and target prices mentioned in this article are based on a report by brokerage house Nomura and do not reflect the views of this publication. Equity investments are subject to market risks, and previous performance does not guarantee future returns. Readers are advised to consult a SEBI-registered financial advisor before making any investment decisions, as these calls do not constitute an offer or solicitation to buy or sell securities. This disclaimer has been generated using AI to support user well-being and responsible content consumption.
