Why is Infosys ADR stock tumbling today?

Shares of Infosys ADR tumbled 7.8% in pre-open trading after the Bengaluru-based IT services giant trimmed its fiscal year 2027 constant-currency revenue growth outlook to a range of 1% to 2%, narrowing sharply from the prior guidance of 1.5% to 3%.

The new midpoint of 1.5% landed below analyst consensus, as most on the Street had anticipated a more modest cut to roughly 1.5%–2.5%, making the revision a negative surprise that drove the pre-market selloff.

The Q2 FY27 results themselves were not uniformly weak — quarterly revenue climbed approximately 11% year-over-year, AI-related revenue expanded to 10.5% of total sales and grew 29% sequentially, operating margin held steady at 21%, and free cash flow came in at $922 million.

However, management’s cautious tone on client spending behavior and its acknowledgment of pricing pressure and competitive intensity were enough to overshadow those bright spots, with investors choosing to focus on the dimmer forward outlook.

The move does not occur in isolation within the IT services sector. Peers such as HCLTech and Wipro had previously flagged similar headwinds — including reduced discretionary spending and project cancellations from large enterprise clients — lending a broader industry context to Infosys’ guidance cut.

Meanwhile, U.S. equity markets were themselves under modest pressure today, with the S&P 500 off 0.5%, the Dow Jones down 0.9%, and the Nasdaq lower by 0.3%, adding a macro headwind to the stock’s pre-market weakness.

The combination of a guidance cut that undershot expectations, cautious management commentary on demand visibility, and a soft broader market environment converged to push the ADR to $12.19 — well below its 52-week high of $30 and uncomfortably close to its 52-week low of $10.12, underscoring how much of the stock’s recovery potential now hinges on a meaningful reacceleration in client spending.