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INFY stock has also outperformed the Zacks Computer and Technology Sector and the S&P 500 index in the past six months. The Zacks Computer and Technology sector and the S&P 500 index have returned 10.3% and 10.1%, respectively, in the past six months.
This outperformance reflects investors’ confidence in INFY’s financials, innovative product launches and steady flow of customer wins.
Infosys Expands Its AI Capabilities
Infosys has been rapidly expanding its footprint in the artificial intelligence (AI) market through acquisitions and partnerships.
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 6 Month Performance
Image Source: Zacks Investment Research
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 sustained focus on expanding its AI capabilities and continuous flow of contracts is likely to continue driving its top line despite the current macroeconomic uncertainties. In the last reported results for first-quarter fiscal 2025, its revenues grew 2.1% year over year. The Zacks Consensus Estimate for fiscal 2025 depicts a further improvement in sales growth. The consensus mark for INFY’s fiscal 2025 revenues is pegged at $19.3 billion, indicating year-over-year growth of 3.7%.
Near-Term Challenges for Infosys
Infosys is currently grappling with macroeconomic headwinds. The protracted inflationary pressure and still-high interest rates have been a major headwind for the company due to expense reduction among its enterprise customers. Furthermore, the company has been encountering slow decision-making processes, softness in digital transformation programs and discretionary spending in the current uncertain macroeconomic environment, which is hurting volumes.
The company’s 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. However, the recent rate cuts by the Federal Reserve might benefit Infosys in the coming quarters.
What Should Investors Do?
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.
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Infosys Gains 26% in 6 Months: Should You Buy, Sell or Hold the Stock?
Infosys (INFY - Free Report) shares have gained 25.7% in the past six months, outperforming the Zacks Computers - IT Services industry’s return of 4.5%.
INFY stock has also outperformed the Zacks Computer and Technology Sector and the S&P 500 index in the past six months. The Zacks Computer and Technology sector and the S&P 500 index have returned 10.3% and 10.1%, respectively, in the past six months.
This outperformance reflects investors’ confidence in INFY’s financials, innovative product launches and steady flow of customer wins.
Infosys Expands Its AI Capabilities
Infosys has been rapidly expanding its footprint in the artificial intelligence (AI) market through acquisitions and partnerships.
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 6 Month Performance
Image Source: Zacks Investment Research
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 sustained focus on expanding its AI capabilities and continuous flow of contracts is likely to continue driving its top line despite the current macroeconomic uncertainties. In the last reported results for first-quarter fiscal 2025, its revenues grew 2.1% year over year. The Zacks Consensus Estimate for fiscal 2025 depicts a further improvement in sales growth. The consensus mark for INFY’s fiscal 2025 revenues is pegged at $19.3 billion, indicating year-over-year growth of 3.7%.
Near-Term Challenges for Infosys
Infosys is currently grappling with macroeconomic headwinds. The protracted inflationary pressure and still-high interest rates have been a major headwind for the company due to expense reduction among its enterprise customers. Furthermore, the company has been encountering slow decision-making processes, softness in digital transformation programs and discretionary spending in the current uncertain macroeconomic environment, which is hurting volumes.
The company’s 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. However, the recent rate cuts by the Federal Reserve might benefit Infosys in the coming quarters.
What Should Investors Do?
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.