Wipro share price climbs 1% following a 17% drop in ADRs overnight amid growing AI concerns. Do you own?

Wipro share price rose as much as 1% to ₹172.74 apiece on the NSE in Thursday's trading session despite the American Depository Receipts (ADRs) of the IT giant fell over 17% on Wednesday.

Wipro share price opened at ₹169.94 today, as compared to the previous close of ₹170.39 on Wednesday. The stock had hit a 52-week low of ₹169.25 on 1 July.

What's driving Wipro share price?

Wipro ADRs fell over 16.89% to $1.870 apiece on the NYSE, even as ADRs of Infosys rose 1.53% to $10.65, while technology peers Cognizant and Accenture gained 6.04% and 5.38%, respectively.

The fall in the IT giant stock extended its recent decline as investors remained cautious over the company's earnings prospects and the increasing disruption posed by artificial intelligence to traditional IT services.

Meanwhile, the rally in global IT stocks was followed by Anthropic's announcement that the US Commerce Department had lifted export restrictions on its most advanced Fable and Mythos AI models.

The stock has remained under pressure after the company reported weak quarterly earnings and issued cautious management guidance, amid mounting concerns over slowing demand across the global IT services industry.

Recently, JPMorgan downgraded Wipro to "Underweight" from "Neutral" and lowered its price target to $1.70 from $2.20. The brokerage cited mounting pricing pressure from generative AI, along with weak demand, as key headwinds for Indian IT services companies.

The global brokerage firm said consensus earnings estimates for Wipro could still be overly optimistic, citing structural shifts in the IT sector as accelerating AI adoption prompts enterprises to automate a larger share of their operations.

Analysts believe the biggest challenge for traditional IT services firms is reshaping their business models as AI reduces dependence on conventional outsourcing and exerts pressure on billing rates.

Although the sector's fundamentals remain resilient, recent market action suggests investor sentiment is still being weighed down by concerns over future growth prospects in an AI-driven technology landscape.

Wipro share price trend

The IT stock has remained under pressure amid mounting AI worries. Wipro shares have fallen 3% in a week and 19% in a month.

Furthermore, the stock has plunged 36.47% on a year-to-date (YTD) basis and 36% in a year.

Looking at the broader level, the IT stock has failed to impress its long-term investors too by crashing over 13% in three years and 36% in five years.

Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.