AI's structural threat to IT services is real but likely overstated. While agentic AI tools threaten entry-level coding and testing jobs, the reality is more nuanced. Legacy systems powering Fortune 500 companies remain entrenched, with regulatory complexity and institutional knowledge creating natural moats. Companies like TCS and Infosys have breathing room as enterprises struggle with costly system modernization. Markets overreacted to recent AI announcements, with nearly $285 billion in global losses. The true impact will unfold gradually over years, not months. IT services will transform, not vanish. Investors should distinguish between hype and structural risk when evaluating sector exposure.
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