The Indian software services landscape is grappling with a severe structural downturn as of February 13, 2026. A massive sell-off, catalyzed by rapid advancements in autonomous AI agents, has triggered a significant valuation reset across the sector. On February 12, the **Nifty IT Index plummeted 5.51%**, closing at **33,160.20**. This single-session crash wiped out approximately **$52 billion** in market capitalization. The index has now slid more than **12.16% since the start of 2026**, reflecting deep-seated investor anxiety. Market Dynamics and Weightage The sector's dominance in the national benchmark is fading. The IT sector’s weightage in the Nifty 50 has contracted to **9.2%**, down from **10.8%** earlier this month. This shift has seen the Information Technology segment lose its long-held second-place position to the Oil & Gas sector, which now stands at **10.1%**. Stock Performance and ADR Trends The decline is broad-based across industry giants. **TCS** shares hit a 52-week low of **₹2,776**, while **Infosys** and **Wipro** faced intense pressure. Overnight trading of American Depository Receipts (ADRs) signaled further pain, with **Infosys ADRs tanking nearly 10%** on the New York Stock Exchange. Other major players including **HCL Technologies**, **Tech Mahindra**, and **LTIMindtree** recorded losses between **4% and 6%**. The AI Disruption Factor The primary trigger for this "valuation reset" is the emergence of highly specialized AI tools, such as Anthropic’s latest professional automation suite. Unlike previous technology cycles like cloud migration, which created new work streams, AI is perceived as a deflationary threat to the labor-driven outsourcing model. Industry analysts warn that AI could automate up to **40% of traditional revenue streams** in coding, maintenance, and testing. Emerging tools are now capable of completing complex tasks—such as SAP migrations or legal contract reviews—in weeks rather than the years typically billed by IT firms. Sector Outlook While the industry body Nasscom has labeled fears of a total bypass as "misplaced," the market remains in a risk-off mode. Investors are transitioning from a period of experimental hype to a "Year of Truth," demanding proof of how these firms will monetize AI to offset the loss of traditional man-hour billing. The coming trading sessions are critical. The Nifty IT Index is currently testing multi-month lows, and a failure to hold these technical levels could invite further volatility. The sector is now forced to pivot toward an asset-led model, focusing on AI governance and enterprise integration to survive the shifting tech landscape.