Navigating the Future of IT: Analyst Insights for 2026 and Beyond

• November 27, 2025
• Author - Team XALT

The global information technology (IT) sector approaches 2026 at a critical inflection point, contending with persistent macroeconomic headwinds while simultaneously on the cusp of significant transformation driven by artificial intelligence (AI). Leading financial intelligence firms Nomura, CLSA, and Jefferies have articulated distinct yet convergent perspectives, emphasizing themes of gradual recovery, the evolving trajectory of AI’s impact, and the paramount influence of macroeconomic stability. For both institutional and individual investors, a comprehensive understanding of these expert outlooks is crucial for identifying judicious investment opportunities within this dynamic landscape.

A Glimmer of Hope: Anticipated Revenue Growth and Margin Stabilization

Nomura, a prominent global financial services firm, articulates a cautiously optimistic forecast for the IT sector in 2026. The firm anticipates a marginal yet discernible improvement in revenue growth, indicative of a slow but steady recovery from recent operational challenges. This projected revenue uptick is expected to be complemented by a modest enhancement in profit margins. Nomura’s overarching sentiment suggests that while a robust revival in discretionary client spending—a key driver for IT services projects—remains largely contingent on broader macroeconomic improvements, the sector is progressively establishing a more stable operational foundation.

The AI Factor: A Future Catalyst, Not an Immediate Revenue Driver

Despite AI’s pervasive presence in technological discourse and media headlines, its immediate and tangible impact on IT sector revenue growth is largely viewed as a future opportunity rather than a present catalyst, according to analyst consensus. Nomura specifically highlights that significant AI-related opportunities are projected to materialize within the next 12-18 months. This indicates that while foundational investments in AI infrastructure, talent development, and pilot projects are underway, the substantial revenue streams derived from scaled AI solutions are yet to fully materialize across the broader IT services ecosystem.

CLSA echoes this perspective, stressing that notwithstanding the rapidly evolving AI narrative, the Earnings Per Share (EPS) growth for IT companies remains inextricably linked to prevailing macroeconomic conditions. This connection is deemed more influential than any immediate, AI-driven surge in profitability. This distinction is critical: while AI is unequivocally positioned as a long-term transformational force, its short-to-medium term influence on the bottom lines of traditional IT service providers is anticipated to be more incremental and gradual.

Macro Trumps AI: The Enduring Influence of Global Economics

Both CLSA and Nomura consistently underscore the profound and overarching impact of the global macroeconomic environment on the IT sector’s trajectory. CLSA’s 2026 outlook explicitly posits that “Macro to trump AI,” signaling that economic fundamentals will dictate performance more directly than AI adoption in the near term. Key macroeconomic events projected for 2026, such as the US mid-term elections and potential Federal Reserve interest rate cuts, are expected to significantly influence corporate client spending patterns. For instance, Fed rate cuts could stimulate economic activity and corporate investment, indirectly boosting IT budgets. Conversely, election-related uncertainty might lead to deferred IT spending.

Furthermore, CLSA observes that while certain structural headwinds persist for the sector, prospective developments such as resolutions concerning H1B visa policies and advancements in India-US trade agreements could serve as positive catalysts in 2026, facilitating talent mobility and market access. Nomura reinforces this view, reiterating that a pronounced revival in discretionary spending, which underpins growth in IT services, is fundamentally contingent upon a robust global macroeconomic recovery.

Valuations and Selective Opportunities: The Mid-Cap Advantage?

Jefferies notes that a “valuation reset” is currently unfolding within the IT sector, creating an environment ripe for selective investment. The firm identifies a strong correlation between stock performance and EPS revisions, observing that mid-sized IT firms have generally demonstrated superior performance. This outperformance often stems from greater agility, focused niche expertise, or less exposure to legacy systems compared to larger counterparts. Despite this, Jefferies advises caution, citing persistent uncertainty in the growth outlook. Management guidance frequently points to a gradual recovery, which could potentially place consensus expectations for FY27 at risk. This lingering uncertainty is likely to moderate Price-to-Earnings (PE) multiples across the sector.

In contrast, CLSA perceives current valuations as “highly attractive,” particularly within the context of AI-led deflation—where AI’s efficiencies could reduce costs and potentially impact pricing—and a volatile macro environment. This perspective suggests a compelling entry point for long-term investors capable of navigating near-term fluctuations to capitalize on future growth.

Top Picks for 2026: Navigating the Landscape

Analysts are uniform in advocating a selective investment strategy, favoring companies strategically positioned to adeptly navigate the prevailing economic and technological environment.

* Nomura’s Top Picks: Infosys, Coforge, and eClerx are highlighted for their perceived resilience and growth potential.

* CLSA’s Preferences: Within large-cap IT firms, Tech Mahindra and Infosys are favored. For mid-cap plays, Persistent Systems and Coforge are the preferred selections.

* Jefferies’ Selections: Concentrating on mid-sized IT firms, Jefferies identifies Coforge and Sagility as promising prospects.

Notably, Coforge emerges as a consistent top pick across Nomura, CLSA (mid-cap preference), and Jefferies, underscoring its perceived robust growth potential and operational resilience amidst market challenges. Infosys also frequently appears as a favored large-cap stock, suggesting confidence in its strategic positioning and execution capabilities.

Conclusion

The 2026 outlook for the IT sector is characterized by a complex interplay of cautious optimism, macro-driven realities, and the nascent but profound potential of AI. While a comprehensive sector-wide recovery remains largely tethered to improvements in the global economic climate, the underlying structural strengths of the IT industry—coupled with the eventual and inevitable ramp-up of AI-related revenue opportunities—provide compelling rationales for long-term investor confidence. Investors are therefore advised to maintain a selective approach, prioritizing firms that exhibit strong financial fundamentals, demonstrated operational agility, and clear strategic pathways to capitalize on both macroeconomic stabilization and the evolving AI paradigm, as identified by these leading financial analysts.