:max_bytes(150000):strip_icc()/GettyImages-2161909126-ff05970c6e7e4cf4b0be4e24e0832fa6.jpg "Infosys Stock Soars After Company Raises Outlook as AI Demand Drives IT Spending")
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Key Takeaways
- Infosys lifted its guidance for fiscal 2025 saying it expects revenue to grow in the range of 3% and 4%, an improvement from the previous outlook.
- The company reported quarterly results that beat analysts’ earnings and revenue expectations.
- Infosys CEO Salil Parekh highlighted the IT company’s focus on artificial intelligence for enterprise customers.
- The improved full-year revenue guidance comes as analysts expect IT spending to surge, driven by AI investments and ahead of anticipated interest rate cuts.
Infosys (INFY) lifted its revenue guidance, signaling increased spending from the information technology services provider’s customers.
The company said Thursday it expects full-year revenue growth for fiscal 2025 to be in the range of 3% and 4% in constant currency, up from its earlier outlook of a rise between 1% and 3%.
For the fiscal first quarter, Infosys reported that revenue rose 2.5% in constant currency to $4.71 billion, while net profit after minority interest increased 5.4% to $763 million. Both figures exceeded analysts’ estimates.
“With our focused approach for generative AI for enterprises working with their data sets on a cloud foundation, we have strong traction with our clients,” Infosys CEO Salil Parekh said.
American depositary receipts (ADRs) of Infosys were up about 8% in midday trading Thursday, bucking a broader market downturn. The stock has gained 23% so far this year.
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Global IT Spending Is On The Rise
The improved outlook comes as companies increase spending to invest in AI. Gartner forecasts global IT spending to jump in 2024, driven by AI.
Gartner projected that IT services spending will grow to $1.61 trillion, a 7.1% jump from the spending recorded the year prior.
William Blair analysts said that it is still in the “very early stages of an AI revolution” indicating that investment spending is expected to continue into 2025 and beyond, benefiting companies like Infosys.
Corporate spending could also get a boost from a decline in interest rates, as the Federal Reserve is widely expected to cut its benchmark rate in the coming months.