Key Takeaways
- Infosys raised its earnings forecast for fiscal 2025, saying it now expects revenue to grow in the range of 3-4 percent, an improvement from its previous outlook.
- The company reported quarterly earnings that beat analysts' profit and revenue expectations.
- Infosys CEO Salil Parekh emphasized the company's focus on artificial intelligence for enterprise clients.
- The improved full-year revenue outlook comes as analysts expect IT spending to surge on AI investments and expected interest rate cuts.
Infosys (INFY) raised its revenue outlook, pointing to increased spending from clients of the information technology services provider.
The company said Thursday it now expects full-year fiscal 2025 sales growth to be in the range of 3% to 4% on a constant currency basis, up from its previous outlook of 1% to 3% growth.
Infosys said its first-quarter revenue rose 2.5 percent to $4.71 billion on a constant currency basis, and its net income, excluding minority interests, rose 5.4 percent to $763 million. Both figures beat analyst expectations.
“Our approach focused on enterprise generative AI working with data sets on a cloud infrastructure has seen us gain strong traction with clients,” Infosys CEO Salil Parekh said.
Infosys' American depositary receipts rose about 8% in midday trading on Thursday, bucking the broader market decline. The company's shares have risen 23% so far this year.
Trading View
Global IT spending on the rise
The improving outlook comes as businesses increase their investments in AI, with Gartner predicting that global IT spending will surge in 2024, driven by AI.
Gartner predicted that IT services spending will grow 7.1% year over year to $1.61 trillion.
William Blair analysts said the AI revolution is still in its “very early stages” and expect investment spending to continue beyond 2025, benefiting companies like Infosys.
Business spending could also get a boost from lower interest rates, as the Federal Reserve is widely expected to cut interest rates in the coming months.
