News

TCS target price: Morgan Stanley sees over 32% upside to ₹3,540 on OpenAI partnershipMorgan Stanley believes TCS’ OpenAI partnership and data centre push could open up new revenue streams beyond traditional IT services. The brokerage expects investors to begin valuing the business separately as visibility improves from the company’s Hypervault data centre segment.By CNBC-TV18 February 20, 2026, 8:17:15 AM IST (Updated)2 Min ReadMorgan Stanley has retained its overweight rating and target price of ₹3,540 per share for Tata Consultancy Services (TCS), implying an upside of over 32% from the last closing price of ₹2,675.

The brokerage, which has an overweight rating on the stock, sees the company’s partnership with OpenAI as similar to the tie-ups that IT services vendors formed with hyperscalers during the cloud and digital adoption cycle.

On the data centre side, Morgan Stanley said that TCS appears to be moving in the right direction, following the earlier equity investment by TPG in Hypervault and the recent announcement of OpenAI as the first client for a 100 megawatt (MW) facility, with an option to scale capacity further to 1 gigawatt (GW).

Morgan Stanley added that the data centre business could offer long-term optionality for TCS, with investors likely to move towards valuing the company on a sum-of-the-parts basis as revenue visibility from this segment improves over time.

On February 19, TCS announced a strategic partnership with OpenAI aimed at driving artificial intelligence (AI)-led innovation across enterprise, consumer, and social sectors. The collaboration is expected to focus on building AI infrastructure and developing industry-specific agentic AI solutions across Tata Group companies.

As part of the partnership, OpenAI will be the first customer of TCS’ Hypervault data centre, starting with 100 MW capacity and with the potential to scale up to 1 GW. The integration is also expected to extend across Tata Group entities through the deployment of enterprise-grade artificial intelligence tools.

Tata Sons Chairman N Chandrasekaran had said the collaboration marks a milestone in India’s efforts to build artificial intelligence infrastructure, with the potential to support innovation across sectors. 'TCS will ride the AI wave,' he added.

TCS shares have declined sharply in recent weeks amid fresh anxiety over potential disruption to IT services from artificial intelligence (AI). TCS is down nearly 14% in the past month, with market capitalisation under ₹10 lakh crore, while the stock closed the previous session about 1% lower.

Of the 52 analysts who have coverage on the stock 36 have 'buy' ratings and 12 have 'hold' ratings and four have 'sell' ratings.Continue ReadingFirst Published: Feb 20, 2026 8:14 AM ISTTagsMorgan StanleyTata Consultancy ServicesTCS