Two 59%+ winners, four above 25% in Aug – How this AI model keeps picking winners
Investing.com -- Shares of software engineering firm Globant fell more than 15% after the company issued a softer revenue outlook and flagged ongoing demand weakness in its core U.S. market, despite reporting second-quarter results slightly above expectations.
Revenue for the quarter rose 4.5% to $614 million, just ahead of estimates, but growth in North America remained slow, dragged by a large client, while Latin America and tech/telecom verticals were weak. Europe continued to outperform, with double-digit growth.
Management cut its full-year revenue forecast to at least $2.445 billion, implying just 1.2% growth versus its prior 2% outlook, citing slower pipeline conversion across the IT services market. Third-quarter guidance was also light, with revenue of at least $615 million versus consensus around $619 million.
Needham and Morgan Stanley both noted management’s shift toward AI capabilities and subscription-based services, along with a restructuring plan expected to deliver $80 million in annualized cost savings. They expect the new model to take time but view the stock’s steep slide as having priced in a lot of bad news.
Needham maintained its Buy rating but cut the price target to $85, seeing value for long-term investors at roughly 11x FY26 earnings. Morgan Stanley said the stock now trades at a 40% discount to peers, pricing in a permanent slowdown that it sees as temporary.
Both brokerage emphasized that a clear reacceleration has yet to appear, with growth likely to remain muted in the near term.