India's software services sector is in turmoil, with a staggering $115 billion wiped off its market value over the past four months. Earnings reports from major firms like Infosys Ltd. and HCL Technologies Ltd. have disappointed investors, leading to stock declines and multiple analyst downgrades. The NSE Nifty IT Index fell more than 5% recently, marking its lowest point since June 2023, and is now down almost 25% in 2026. This downturn is attributed to a combination of a weak global economy, exacerbated by the ongoing Iran war, and the rise of artificial intelligence, which threatens traditional business models. Analysts express caution, noting that many clients are postponing large IT projects due to economic uncertainty and unclear returns from AI investments. Despite the selloff, some market observers see potential value in the sector, as the IT gauge is trading at less than 17 times its one-year forward earnings, significantly lower than the 30 times at the beginning of last year. However, investors are seeking more concrete results before regaining confidence in the sector's recovery.