INFY Should I Buy
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Infosys Ltd is not a strong buy for a beginner, long-term investor at this moment. The stock is facing bearish technical indicators, declining financial performance, and negative sentiment from analysts. While the partnership with Intel is a positive catalyst, it is overshadowed by the structural risks highlighted by analysts and the current market sentiment.
The stock's MACD is positive and expanding, but the RSI is neutral at 45.06, showing no clear momentum. Moving averages are bearish (SMA_200 > SMA_20 > SMA_5), and the stock is trading near its pivot level of 14.289. Support levels are at 13.806 and 13.507, while resistance levels are at 14.772 and 15.071. The overall trend suggests bearish momentum.
Infosys has announced an expanded partnership with Intel to enhance AI performance and scalability, which could improve its competitiveness in the AI sector. Hedge funds have significantly increased their buying activity, up 2577.23% over the last quarter.
Analysts have downgraded the stock, citing structural risks in the IT services business due to AI's impact. Financial performance in Q3 2026 showed declining net income (-7.31% YoY), EPS (-5.26% YoY), and gross margin (-7.25% YoY). Options data reflects bearish sentiment, and the stock is expected to decline further in the short term (-1.86% in the next day, -3.35% in the next week).
In Q3 2026, Infosys reported a 3.24% YoY increase in revenue to $5.1 billion. However, net income dropped by 7.31% YoY to $747 million, EPS declined by 5.26% to $0.18, and gross margin fell by 7.25% to 28.28%. These figures indicate weakening profitability despite modest revenue growth.
Analysts have downgraded the stock to Hold, with Jefferies lowering the price target to $14.31 from $20.82, citing structural risks in the IT services business. Stifel also reduced its price target to $17 from $19, maintaining a Hold rating. TD Cowen raised the price target slightly to $17 but also kept a Hold rating. Overall, analysts are cautious about the stock's future performance.
