Cognizant Stock Jumps Nearly 8% as Accenture's Blowout Results Spark Rally in IT Services Amid AI Fears

NEW YORK — Shares of Cognizant Technology Solutions jumped nearly 8% on Thursday, riding a wave of optimism across the information technology services industry after rival Accenture reported stronger-than-expected results and an upbeat outlook that eased concerns about the impact of artificial intelligence on the sector.

Cognizant stock rose $4.42, or 7.69%, to $61.86 as of 11:17 a.m. Eastern time on the Nasdaq, making it one of the best-performing stocks in the S&P 500 on a day when the broader market was under pressure from rising Treasury yields.

Cognizant did not release any company-specific news Thursday. The rally appeared to be driven by investors betting that Accenture's strong performance signals healthier demand across the IT services industry.

Accenture sparks sector rally

The gains came after Accenture, the world's largest consulting and IT services company, surged more than 22% following its fiscal fourth-quarter report.

Accenture posted adjusted earnings of $3.29 per share and revenue of $18.7 billion, both above analysts' forecasts. The company reported $22.2 billion in new bookings and issued a fiscal 2027 outlook calling for revenue growth of 3% to 6% in local currency, above Wall Street's expectations.

Cognizant shares rose about 7% in premarket trading following Accenture's report and extended those gains after the opening bell.

Investors often view Accenture's results as a bellwether for the broader IT services industry, given its size and its exposure to corporate technology spending across many sectors. Strong bookings and a confident outlook from Accenture suggested that companies are continuing to invest in large technology and AI transformation projects, a positive sign for peers such as Cognizant.

Easing AI disruption fears

IT services stocks have faced pressure this year amid concerns that generative AI tools could reduce demand for the labor-intensive software development, maintenance and outsourcing work that makes up much of the industry's business.

Accenture's results helped calm some of those fears, suggesting that AI is creating new opportunities for service providers as companies seek help adopting the technology.

Cognizant has positioned itself as what it calls an "AI builder," helping clients integrate artificial intelligence into their businesses. The company has said more than 40% of its software development is now AI-assisted and that it has more than 8,000 AI engagements with clients.

"As organizations shift from AI experimentation to enterprise-scale execution, we believe the market opportunity ahead is larger than ever, and we're positioning Cognizant to lead in this next era," the company said in its most recent earnings release.

Cognizant has partnerships with AI developers including Anthropic, Google and OpenAI.

Recent results

In its second-quarter report in late July, Cognizant posted revenue of $5.5 billion, up 4.5% from a year earlier, or 4.1% in constant currency. Adjusted earnings rose to $1.37 per share, and adjusted operating margin expanded 0.4 percentage point to 16%.

The company's financial services business was a standout, with revenue growing 12% from a year earlier.

Cognizant raised its full-year adjusted earnings forecast to $5.70 to $5.82 per share, representing growth of 8% to 10%. However, it narrowed its 2026 revenue growth outlook to 4% to 5.5% in constant currency, down from a previous range of 4% to 6.5%, citing continued caution in clients' discretionary spending.

Investing in AI and buybacks

Cognizant has been investing heavily to expand its AI capabilities. In the first half of the year, the company spent $1.3 billion on acquisitions aligned with its AI strategy, including Astreya, a provider of AI infrastructure and managed services.

The company has also been returning cash to shareholders, spending $1.6 billion on share repurchases in the first half of the year, including more than $1.1 billion in the second quarter alone.

Earlier this year, Cognizant launched Project Leap, a program aimed at reshaping its operating model by funding investments in AI and its workforce while improving productivity through AI-driven efficiencies.

Broader market backdrop

Cognizant's rally stood out against a weak broader market. Major U.S. stock indexes were lower Thursday morning as the yield on the 10-year Treasury climbed above 5.3%, its highest level since 2002, and oil prices rose more than 2%.

Other technology services and consulting stocks also moved higher in sympathy with Accenture, reflecting a broad reassessment of the sector's prospects.

About Cognizant

Based in Teaneck, New Jersey, Cognizant is one of the world's largest IT services companies, providing consulting, software development, digital transformation and outsourcing services to clients in industries including financial services, health care and manufacturing. The company is led by Chief Executive Ravi Kumar S and employs more than 350,000 people worldwide.

Investors will look to Cognizant's third-quarter results, expected later this month, for evidence that demand trends seen at Accenture are also lifting its business. Key areas to watch include large-deal bookings, growth in AI-related work and any change to the company's full-year revenue outlook.