Cognizant Technology Solutions Corp.
Cognizant Technology Solutions (CTSH) is a large IT services and consulting company focused on digital transformation, cloud migration, application development and business process services for clients across healthcare, financial services, retail and other sectors. With a market capitalisation of about $33.6 billion, Cognizant blends legacy outsourcing contracts with faster-growing digital and cloud work. Investors should note the company's efforts to shift its revenue mix toward higher-margin, recurring digital services while managing cost pressures and competition from peers such as Accenture, TCS and Infosys. Key considerations include client concentration, exposure to wage and pricing pressure, and sensitivity to macroeconomic slowdowns. Financial metrics such as revenue growth, operating margins and free cash flow are useful to watch. This summary is educational, not investment advice; stock values can rise or fall and suitability depends on an individual’s situation.
Why It's Moving
Cognizant Accelerates AI Push with New India Lab and Strategic Acquisition Amid Strong Q3 Momentum.
Cognizant unveiled an Artificial Intelligence Lab and Cognizant Moment™ Studio in Bengaluru on December 11, extending its $1 billion generative AI investment and building on its San Francisco hub's latest patent. The moves coincide with the recent acquisition of 3Cloud, a Microsoft Azure AI specialist, signaling deepened expertise in multi-agent systems and responsible AI to capture rising client demand.
- Q3 revenue hit $5.42B, up 7.4% YoY and beating estimates by $100M, driven by broad-based growth and six large deals that underscore robust IT services demand.
- Adjusted EPS rose 11% to $1.39, topping forecasts, with management lifting full-year revenue guidance to 6.0%-6.3% constant currency, reflecting AI-fueled confidence.
- Pending Q1 2026 close of 3Cloud deal bolsters Azure and AI capabilities, while insider sales remain minor against $1.5B year-to-date shareholder returns.
Cognizant Accelerates AI Push with New India Lab and Strategic Acquisition Amid Strong Q3 Momentum.
Cognizant unveiled an Artificial Intelligence Lab and Cognizant Moment™ Studio in Bengaluru on December 11, extending its $1 billion generative AI investment and building on its San Francisco hub's latest patent. The moves coincide with the recent acquisition of 3Cloud, a Microsoft Azure AI specialist, signaling deepened expertise in multi-agent systems and responsible AI to capture rising client demand.
- Q3 revenue hit $5.42B, up 7.4% YoY and beating estimates by $100M, driven by broad-based growth and six large deals that underscore robust IT services demand.
- Adjusted EPS rose 11% to $1.39, topping forecasts, with management lifting full-year revenue guidance to 6.0%-6.3% constant currency, reflecting AI-fueled confidence.
- Pending Q1 2026 close of 3Cloud deal bolsters Azure and AI capabilities, while insider sales remain minor against $1.5B year-to-date shareholder returns.
Stock Performance Snapshot
Analyst Rating
Analysts advise buying Cognizant's stock with a target price of $84.9, indicating growth potential.
Financial Health
Cognizant is demonstrating strong revenue and cash flow, indicating healthy financial performance.
Dividend
Cognizant's dividend yield of 1.58% is moderate, offering some income to investors. If you invested $1000 you would be paid $12.30 a year in dividends (based on the last 12 months).
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Explore BasketWhy You’ll Want to Watch This Stock
Cloud & digital shift
Cognizant is moving revenue toward cloud, digital and managed services, which can drive higher-margin work, though execution and client adoption vary over time.
Global client footprint
A diversified client base across industries offers scale and cross-sell opportunities, but concentration in a few large clients can elevate revenue volatility.
Efficiency and margin focus
Management initiatives target productivity and margin improvement; investors should weigh cost measures against investment in growth capabilities.
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