DXC - Investors punish DXC Technology despite an AI announcement

2024-05-17 12:13:28 ET

Shares of DXC Technology Co (NYSE: DXC) are down over 15% even though the information technology company made an AI announcement on Friday.

partners with Ferrovial and Microsoft

The multinational based out of Ashburn, Virginia teamed up with Ferrovial and Microsoft this morning on Quercus.

The new generative artificial intelligence platform is expected to help organisations integrate “secure, responsible AI solutions to automate processes for improved profitability and efficiency”.

Quercus will run on Azure while the responsibility of “evolving, maintaining, and commercialising” it will rest with , as per the press release today.

The three companies also committed to helping ramp up and “scale the adoption of Gen AI” as part of their agreement announced on Friday. DXC stock is now down more than 30% versus its year-to-date high.

Why is DXC stock down on Friday?

Shares of DXC Technology are taking a hit this morning primarily because it reported a decline in revenue for its first quarter last night.

Investors are concerned also because the New York listed firm said its organic revenue will remain in red not just in the current quarter but in fiscal 2025 as a whole.

did also issue guidance for adjusted per-share earnings on Thursday that missed Wall Street estimates for both the quarter as well as the full year.

Also today, analysts at Susquehanna reiterated their “neutral” rating on DXC stock but trimmed their price objective to $15 which suggests another 10% downside from here.

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