Wipro ADRs Surge 5% to Two-Month High Despite Q2 Profit Dip as Anti-AI Trade Boosts IT

The Quick Take

• Wipro ADRs rose 5% to a near two-month high despite Q2 net profit declining and deal bookings falling sequentially
• Q3 IT services revenue guidance set at $2.571B–$2.625B; CEO expressed optimism on upcoming bookings
• Rally attributed to 'anti-AI trade' rotation into undervalued traditional IT services names

Wipro's American depositary receipts advanced 5% to a near two-month high despite the company reporting muted September-quarter results, with net profit declining and deal bookings falling sequentially. The company issued Q3 IT services revenue guidance in the range of $2.571 billion to $2.625 billion while its CEO expressed optimism about upcoming deal bookings. The divergence between soft fundamentals and strong ADR performance highlights how market sentiment can decouple from near-term results when sector rotation dynamics take precedence over earnings quality.

Analysts are attributing a portion of the rally to what some traders are calling an 'anti-AI trade'—a rotation out of AI infrastructure and hyperscaler stocks and into traditional IT services names that had underperformed during the AI enthusiasm cycle. Wipro, Infosys, and HCL Tech have lagged AI-adjacent names significantly over the past year, creating a valuation gap that mean-reversion buyers are now exploring. Whether the rotation is sustainable depends on whether enterprise IT services demand firms up independently of the AI capex cycle, which Wipro's CEO suggested he expects.

Synthesized from 1 source.