Infosys Ltd., India's second-largest IT services company, delivered a standout third-quarter performance on Wednesday that sent its stock soaring more than 7% as investors cheered better-than-expected results and a raised full-year outlook powered by surging AI demand.

The Bengaluru-based technology giant reported quarterly revenue of $5.1 billion, narrowly beating analyst expectations of just under $5 billion. Earnings per share came in at $0.21, topping consensus estimates by a penny—a modest beat that nonetheless reinforced confidence in the company's strategic direction.

Stellar Deal Wins Signal Strong Demand

The real headline, however, was Infosys's remarkable deal pipeline. The company secured $4.8 billion in large deal wins during the quarter, a figure that far exceeded analyst expectations and signals robust enterprise demand for IT transformation services despite broader economic uncertainties.

"Our performance was broad-based in Q3 with 0.6% sequential revenue growth, 0.2% adjusted operating margin expansion, stellar large deal wins at $4.8 billion and robust adjusted free cash generation at $965 million in a seasonally weak quarter," said Jayesh Sanghrajka, Infosys's Chief Financial Officer.

The company noted that demand for its services remains resilient across key verticals, with financial services, manufacturing, and retail clients increasingly turning to Infosys for digital transformation and AI-powered solutions.

AI Initiatives Gain Traction

Central to Infosys's growth story is its expanding suite of artificial intelligence offerings. The company launched Topaz Fabric, an AI agent services platform that has attracted significant client interest. The platform represents Infosys's broader push to position itself as a leader in enterprise AI implementation.

Industry analysts have noted that Infosys's early investments in generative AI capabilities are beginning to pay dividends. The company has been training its workforce extensively on AI technologies and has developed proprietary tools that help clients automate complex business processes.

"We see significant opportunities ahead as enterprises accelerate their AI adoption journeys. Our investments in building AI-first capabilities are resonating with clients across industries."

— Infosys CEO Salil Parekh

Raised Guidance Signals Confidence

Perhaps most significantly, Infosys raised its full-year revenue growth guidance to 3% to 3.5%, up from its previous forecast. The company maintained its operating margin guidance in the 20% to 22% range, suggesting it can pursue growth while preserving profitability.

The upgraded outlook comes at a time when the global IT services sector faces mixed signals. While demand for AI-related services is surging, traditional IT outsourcing has faced headwinds as some clients tighten discretionary spending. Infosys's ability to navigate this environment has impressed investors.

Market Reaction and Competitive Position

Infosys shares jumped more than 7% on the news, with the stock trading at $17.92 in premarket U.S. trading. On the National Stock Exchange of India, shares rose 1.75% to Rs 1,625.50.

The strong results position Infosys favorably against its peers in the Indian IT services sector, including Tata Consultancy Services and Wipro, which report earnings in the coming weeks. Analysts will be watching closely to see whether the robust demand that lifted Infosys extends across the broader industry.

What This Means for Investors

For investors, Infosys's results offer several key takeaways:

  • AI is becoming a meaningful growth driver: The Topaz platform and related AI services are moving from experimental to revenue-generating, suggesting the AI investment cycle is creating real opportunities for IT services firms.
  • Deal pipeline strength suggests durable demand: The $4.8 billion in large deal wins indicates that enterprises remain committed to digital transformation despite economic headwinds.
  • Margin resilience is intact: Infosys has demonstrated it can pursue growth without sacrificing profitability, a balance that should support continued shareholder returns.

As the earnings season for IT services continues to unfold, Infosys's strong showing has set a high bar for the sector. The company's ability to capitalize on the AI boom while maintaining operational excellence suggests it remains well-positioned for the opportunities and challenges ahead in 2026.