Mutual funds have sharply reduced their exposure to technology stocks amid rising uncertainty around artificial intelligence-led disruption, slowing global IT spending and weak earnings visibility. According to the latest report by Motilal Oswal Financial Services, technology sector weight in mutual fund portfolios slipped to an eight-year low of 6.7% in April 2026, down 60 basis points month-on-month and 180 basis points year-on-year. The sharp reduction in allocation comes at a time when the Nifty IT index has significantly underperformed broader markets over the past year. Concerns have grown that Indian IT companies may be losing out on the early AI opportunity.