We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Infosys Adds New AI Client: How Should Investors Play the Stock?
Read MoreHide Full Article
Infosys (INFY - Free Report) shares have gained 23.4% year to date, outperforming the Zacks Computer and Technology Sector and S&P 500 index’s return of 22.4% and 19.7%, respectively.
INFY stock has also outperformed the Zacks Computers - IT Services industry’s return of 7.2% in the same time frame. The outperformance reflects investors’ confidence in Infosys’ fundamentals and growing client base.
Recently, Infosys expanded its client base with a top European delivery and logistics company, Posti. INFY will utilize its artificial intelligence (AI) expertise to improve Posti’s customer experience and operational efficiency.
This new seven-year project develops upon their longstanding relationship in which INFY enhanced Posti’s information technology (IT) infrastructure. In this new project, INFY will leverage Infosys Topaz and Cobalt to deploy AI-based solutions through a cloud environment. This upgrade in Posti’s IT architecture has the potential to place Posti in the top tier of the logistics business.
So far this year, INFY has gained numerous clients who are interested in Infosys’ AI expertise. The list includes Metro Bank, LIC India, TDC Net, Roland-Garros, Telstra and First Abu Dhabi Bank.
Infosys YTD Performance
Image Source: Zacks Investment Research
INFY Vastly Invests in AI
Infosys is expanding its AI capabilities both organically and inorganically. INFY launched Aster at the beginning of 2024. The platform is powered by Infosys Topaz and uses Unreal Engine 3D, AR/VR/XR and CGI modeling to deliver an immersive experience. Infosys also gained ISO 42001:2023 certification for its AI management systems.
Its inorganic expansion comprised multiple acquisitions and collaborations. The acquisition of In Semi enhanced INFY’s R&D capabilities in the fields of AI, 5G, hyperconnectivity and high-performance computing. Infosys has collaborated with industry leaders, including NVIDIA (NVDA - Free Report) , ServiceNow (NOW - Free Report) and Intel (INTC - Free Report) , to deliver solutions in AI.
Infosys collaborated with NVIDIA and combined its Topaz with the latter’s NIMs to deliver TOSCA Network Service Design, one generative AI-powered smart networking operating center and Infosys Cortex.
ServiceNow and Infosys developed a solution by combining the Now Platform and the Infosys Enterprise Service Management Cafe to boost enterprise business services. Infosys collaborated with Intel to integrate Intel Xeon processors, Intel Gaudi accelerators and Intel Core Ultra Processors to improve the performance of Topaz.
Infosys Faces Macroeconomic Headwinds
Infosys’ near-term prospects might be hurt by softening IT spending amid macroeconomic headwinds. The rising inflation has been a major challenge for the company due to expense reduction among its enterprise customers. Digital transformation projects, being discretionary expenses for companies, are experiencing a slowdown, affecting INFY’s revenues.
Over the past few quarters, Infosys’ revenue growth rate has decelerated to a low-to-mid single-digit percentage range from a double-digit percentage rate till fiscal 2023.The Zacks Consensus Estimate for INFY’s 2025 revenues is pegged at $19.3 billion, indicating year-over-year growth of 3.7%.
Additionally, Infosys’ business is highly prone to currency volatility between the Indian Rupee and the U.S. dollar, as the majority of its revenues are derived from the U.S. markets.
Conclusion
INFY’s steady flow of contracts and expanding AI expertise reflects solid top-line growth potential. However, the stock has a stretched valuation as reflected by the Zacks Value Score of F, suggesting that investors should wait for a better entry time. Infosys currently carries a Zacks Rank #3 (Hold), You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Infosys Adds New AI Client: How Should Investors Play the Stock?
Infosys (INFY - Free Report) shares have gained 23.4% year to date, outperforming the Zacks Computer and Technology Sector and S&P 500 index’s return of 22.4% and 19.7%, respectively.
INFY stock has also outperformed the Zacks Computers - IT Services industry’s return of 7.2% in the same time frame. The outperformance reflects investors’ confidence in Infosys’ fundamentals and growing client base.
Recently, Infosys expanded its client base with a top European delivery and logistics company, Posti. INFY will utilize its artificial intelligence (AI) expertise to improve Posti’s customer experience and operational efficiency.
This new seven-year project develops upon their longstanding relationship in which INFY enhanced Posti’s information technology (IT) infrastructure. In this new project, INFY will leverage Infosys Topaz and Cobalt to deploy AI-based solutions through a cloud environment. This upgrade in Posti’s IT architecture has the potential to place Posti in the top tier of the logistics business.
So far this year, INFY has gained numerous clients who are interested in Infosys’ AI expertise. The list includes Metro Bank, LIC India, TDC Net, Roland-Garros, Telstra and First Abu Dhabi Bank.
Infosys YTD Performance
Image Source: Zacks Investment Research
INFY Vastly Invests in AI
Infosys is expanding its AI capabilities both organically and inorganically. INFY launched Aster at the beginning of 2024. The platform is powered by Infosys Topaz and uses Unreal Engine 3D, AR/VR/XR and CGI modeling to deliver an immersive experience. Infosys also gained ISO 42001:2023 certification for its AI management systems.
Its inorganic expansion comprised multiple acquisitions and collaborations. The acquisition of In Semi enhanced INFY’s R&D capabilities in the fields of AI, 5G, hyperconnectivity and high-performance computing. Infosys has collaborated with industry leaders, including NVIDIA (NVDA - Free Report) , ServiceNow (NOW - Free Report) and Intel (INTC - Free Report) , to deliver solutions in AI.
Infosys collaborated with NVIDIA and combined its Topaz with the latter’s NIMs to deliver TOSCA Network Service Design, one generative AI-powered smart networking operating center and Infosys Cortex.
ServiceNow and Infosys developed a solution by combining the Now Platform and the Infosys Enterprise Service Management Cafe to boost enterprise business services. Infosys collaborated with Intel to integrate Intel Xeon processors, Intel Gaudi accelerators and Intel Core Ultra Processors to improve the performance of Topaz.
Infosys Faces Macroeconomic Headwinds
Infosys’ near-term prospects might be hurt by softening IT spending amid macroeconomic headwinds. The rising inflation has been a major challenge for the company due to expense reduction among its enterprise customers. Digital transformation projects, being discretionary expenses for companies, are experiencing a slowdown, affecting INFY’s revenues.
Over the past few quarters, Infosys’ revenue growth rate has decelerated to a low-to-mid single-digit percentage range from a double-digit percentage rate till fiscal 2023.The Zacks Consensus Estimate for INFY’s 2025 revenues is pegged at $19.3 billion, indicating year-over-year growth of 3.7%.
Additionally, Infosys’ business is highly prone to currency volatility between the Indian Rupee and the U.S. dollar, as the majority of its revenues are derived from the U.S. markets.
Conclusion
INFY’s steady flow of contracts and expanding AI expertise reflects solid top-line growth potential. However, the stock has a stretched valuation as reflected by the Zacks Value Score of F, suggesting that investors should wait for a better entry time. Infosys currently carries a Zacks Rank #3 (Hold), You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.