2023-06-21 12:13:05 ET
Infosys ( NYSE: INFY ) stock dipped ~2% on Wednesday after Susquehanna Financial Group downgraded Infosys ( INFY ) to Negative.
The firm's analysts said that Infosys is among the world's great tech companies with a powerful brand built on operational excellence. However, the analysts are worried that some of thecompany's current competitive advantages may be eroding due to architectural changes.
The analysts added that they were lowering estimates futher below consensus and moving to Negative with a $13 price target.
The analysts' research indicates that several factors may be tempering demand. As known, macro is delaying discretionary work industrywide, and AI seems to be slowing decision making as customers make architectural changes.
The analysts noted they are also starting to hear that AI and its implicit open sourcing is starting to create pricing pressure for vendors.
The firm noted customers want shared savings, and it is to to be seen that which supplier reduces prices first. If not, insourcing may be a real alternative again. While there is always a chance of progress in large deal formation beyond the firm's estimates, the risk to revenue leads the analysts to go Negative with a $13 price target.
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Infosys cut to Negative at Susquehanna