IT Stocks Crash Feb 2026: How Trump's $100K H-1B fee and AI automation tools from Palantir/Anthropic are disrupting the Indian outsourcing model.

The IT sell-off today (February 12, 2026) is the culmination of a "Systemic Shock" caused by the Trump administration's radical shifts in H-1B policy.

The Current Market Reality (Feb 12, 2026)

The Nifty IT index has dived nearly 4% today, with heavyweights like Infosys, TCS, and Tech Mahindra leading the slide. While the "H-1B revocation" headlines are technically nuanced, the market is pricing in the $100,000 application fee and the Merit-Based Lottery overhaul that effectively "re-factors" the cost of doing business in the US.

Why IT Stocks are Crashing

  • The $100,000 "Entry Tax": The executive order imposing a $100,000 fee per new H-1B visa has essentially destroyed the cost-advantage model of Indian outsourcing. For a company like TCS or Wipro, sponsoring 1,000 new workers now costs an additional $100 million in fees alone.

  • Merit-Based "Kernel" Update: The random lottery has been replaced with a Wage-Ranked Selection (effective Feb 27, 2026). This means only high-salary roles (Level 3 and 4 wages) will get visas, making entry-level offshore deployments nearly impossible.

  • The "Anthropic/Palantir" Shock: Adding to the visa woes, recent news that AI tools can now complete SAP migrations in weeks instead of years has investors terrified of "AI Deflation" hitting traditional service revenues.

Trading Strategy

What to do now:

  • Don't "Jump" to Buy the Dip: As you noted in your previous morning commentary, let the stocks settle. The IT sector has lost ₹2.5 lakh crore in market value over just the last few days.

  • Focus on the "Pivot": Watch for companies that are aggressively moving to Cloud/AI delivery or hiring locally in the US. The traditional "body-shopping" model is currently being "deprecated."

  • Sector Rotation: While IT is bleeding, sectors like PSU Banks and Metals have shown relative strength today.

Dhaval Visariya

AMFI Registered Distributor (ARN-327925) | Software Developer & Finance Enthusiast

Connect with me:
LinkedIn | Telegram | YouTube | GitHub | Medium

Disclaimer: I am an AMFI Registered Mutual Fund Distributor. Views expressed here are for educational purposes. Mutual Fund investments are subject to market risks, read all scheme related documents carefully.
📧 Contact: info.apollofinancialservices@gmail.com

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