WIT - Infosys: Facing Uncertainty As Gen AI Takes Time To Deliver
2024-04-04 07:41:35 ET
Summary
- Infosys shares have gained over 30% since the release of its Topaz Generative AI tool, but have now dropped to $17.52.
- The company is facing demand uncertainty and lower margins, with the AI tailwind not materializing as expected.
- Gartner predicts that companies will focus more on traditional IT projects and profitability optimization, delaying investment in Generative AI.
- Therefore, this is not the time to invest as there are volatility risks.
- Even then, I have a Hold position as this remains a profitable company with a strong balance sheet.
The shares of Indian IT giant Infosys ( INFY ) gained more than 30% to reach $20.6 since it released its Topaz Generative AI (Gen AI) tool in May 2023. Even when the company missed topline expectations during the third-quarter 2024 (Q3) earnings call in January this year, the stock continued to advance but had dropped to $17.5 at the time of writing....
Infosys: Facing Uncertainty As Gen AI Takes Time To Deliver