Infosys's stock suddenly surges 50% - then cools off. Inside Wall Street's big Friday mystery.

By Joseph Adinolfi and Emily Bary The confounding stock move set off speculation in the investment community Infosys shares surged Friday on heavy volume. It was a stock-market mystery. On an otherwise quiet Friday at the end of the final full week of trading in the U.S. for 2025, U.S.-traded American depositary receipts of Infosys (INFY), a $78 billion Indian information-technology company, spiked as much as 56% on extreme volume that forced multiple trading halts. The magnitude of the move, along with the fact that it didn't spread to shares of other large Indian tech firms, left some investors scratching their heads. Morningstar analyst Luke Yang told MarketWatch that Friday's ADR surge didn't seem related to Infosys's business fundamentals, as it contrasted with a more muted move in the company's India-listed shares (IN:500209). "I would attribute the stock's abnormal move to market-speculation activities, potentially related to the options market," he said in emailed comments. But traders on two Wall Street equity-trading desks told MarketWatch that there was, in fact, more to the story. The big swing was the result of a massive short squeeze, they said, as a broker was left scrambling for shares of the Infosys ADRs. What they believe happened, one of the traders explained, was that a customer went to their broker to buy shares of Infosys, but asked to take delivery in Infosys ADRs, as opposed to the ordinary shares that trade on the Indian market. The broker agreed, but only had ordinary Infosys shares on hand. For whatever reason, when the time came to make delivery, the broker had trouble converting the ordinary shares to ADRs, and was left scrambling to source a borrow, leaving them on the hook for the massive premium as the shares rocketed higher. The surge drew in other investors looking to either fade the move - that is, betting on the stock to fall - or keep the rally going. "Once someone is offsides, and you create all of this artificial buying in the tape, then you start to see all kinds of stuff going on," one trader told MarketWatch. About halfway through the trading session, Friday volume for Infosys ADRs was about 82 million shares, already the highest in more than a decade, and with hours still left in the trading session. The stock typically trades about 10 million shares a day, one trader told MarketWatch. At peak levels Friday, Infosys shares touched $30, a new all-time intraday high and enough for the stock's largest one-day intraday price gain on record, according to Dow Jones Market Data. Shares have since calmed somewhat, recently changing hands up 5.7%. An Infosys spokesperson didn't immediately respond to a MarketWatch request for comment about Friday's move. The wild spike in Infosys shares came as they've otherwise been challenged this year, falling 4% over the course of 2025. The information-technology company, which sells outsourcing and consulting services, has struggled to drive discretionary new demand for its products, according to a Guggenheim report from earlier in the week. Like U.S.-based IT and consulting companies, Infosys has had to deal with a somewhat cautious spending landscape, but is banking on new business opportunities as customers take their cost savings and invest them in new initiatives. Infosys has also been caught up in worries about President Donald Trump's changes to U.S. visa programs, which include higher hurdles for outsourced labor. "The policy signals an immediate and significant shift in the technology and outsourcing labor markets as the $100,000 fee, in most cases, makes staffing through the H-1B process uneconomical," William Blair's Maggie Nolan wrote in September, flagging Infosys as one of the stocks she covered that had among the most exposure to H-1B visas. Other factors may have contributed to Friday's swing. One of the traders who spoke with MarketWatch said the fact that Friday was a major options expiration could have exacerbated the volatility. -Joseph Adinolfi -Emily Bary This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal. (END) Dow Jones Newswires 12-19-25 1312ET