US IT Industry Earnings Wave is about to Strike, Goldman Sachs Bullish on These Three Targets.

Regarding the upcoming fourth-quarter 2024 financial report for the IT services industry, Goldman Sachs Group, Inc. expects that the IT industry's financial report will reflect a gradual improvement in demand through the guidance for 2025. Based on management commentary and the results of Accenture Plc Class A for the quarter, Goldman Sachs Group, Inc. anticipates moderate growth in IT services in Q4. Goldman Sachs Group, Inc. also believes that the guidance for 2025 will show moderate revenue acceleration, reflecting a gradual improvement in the customer demand environment. Despite the fact that fundamentals have bottomed out, Goldman Sachs Group, Inc. believes that investor expectations have deteriorated in recent weeks due to more severe unfavorable factors in the foreign exchange market. As the cyclical headwinds gradually ease, Goldman Sachs Group, Inc. now leans towards companies with a focus on applications. In terms of related targets, Goldman Sachs Group, Inc. gives "buy" ratings to IBM(IBM.US), Globant(GLOB.US), and EPAM(EPAM.US); a "neutral" rating to Cognizant Technology Solutions Corporation Class A(CTSH.US); and a "sell" rating to TaskUs(TASK.US). IBM Goldman Sachs Group, Inc. notes that software growth in 2025 will continue to accelerate; with software growth continuing to reflect an acceleration trend compared to historical performance, IBM remains in a good growth position. Goldman Sachs Group, Inc. forecasts for the fourth quarter are generally in line with Wall Street consensus, but Goldman Sachs Group, Inc. expects that the guidance for 2025 will reflect the outstanding performance of Red Hat and higher revenue from large mainframe updates scheduled for the second quarter of 25. Investors may view software growth in CKH HOLDINGS investments as a key indicator, while consulting business trends will be scrutinized more closely. Goldman Sachs Group, Inc. still believes that IBM can shift its software portfolio towards mid to high single-digit growth while gaining consulting market share, and sees the Investor Day (February 4th) as the next catalyst for the stock, with room for multiple expansions. Globant Goldman Sachs Group, Inc. expects robust growth prospects for Globant - with profit margins expanding solidly in 2025. Goldman Sachs Group, Inc. believes that Globant's performance for the fourth quarter will be largely in line with expectations, but the guidance for 2025 will reflect revenue acceleration and stable profit margin growth, benefiting from its unique positioning in high-growth verticals in the backdrop of a gradual cyclical recovery. Goldman Sachs Group, Inc. expects investors to focus on revenue growth trends to measure the speed of potential revenue reacceleration in 2025. EPAM Goldman Sachs Group, Inc. expects that EPAM's outlook for 2025 may reflect moderate organic growth. For EPAM, Goldman Sachs Group, Inc. anticipates that the guidance for 2025 will reflect a trend of stable to improved free cash flow. Goldman Sachs Group, Inc. believes the company will capitalize on the demand recovery for new technology builds and other high-end engineering services. With fundamentals improving in 2025, Goldman Sachs Group, Inc. states that investors will be watching for EPAM's pace of organic re-acceleration.