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Investing.com -- Jefferies starts coverage on U.S. IT services firms, with Grid Dynamics Holdings with a Buy rating and a $11 price target, saying investor fears that artificial intelligence could undercut its business are overdone.
“Concerns of AI disruption have pushed valuation to historically attractive levels,” Jefferies wrote.
The analysts expect Grid’s revenue growth to improve from high single digits this year to low double digits in 2026, with stable to higher margins.
“While the debate remains highly polarized, our sense is the bear thesis is at maximum hype,” the note said.
Jefferies argued that AI remains immature, with many projects failing at the proof-of-concept stage, and that companies will still rely on IT services expertise as the technology matures.
The firm also noted that 23% of Grid’s revenue already comes from data and AI-related work, growing at more than 20% a year.
By contrast, Jefferies initiated Unisys Corp at Hold with a $4 price target, saying early signs of a turnaround are encouraging but execution risk remains high.
“After multiple iterations of trying to execute a turnaround, there are signs the current strategy may be the right one,” the analysts said.
Revenues have held steady near $2 billion since 2022, but bookings and new customer wins are rising, which Jefferies said could support growth from 2026.
Unisys has also reduced its pension liabilities, long seen as an overhang, and recently issued $700 million in new notes to restructure debt and fund the pension. Still, Jefferies said it wants to see more consistent progress before assigning the stock a higher multiple.