Can the 3Cloud Acquisition Push Cognizant Stock Higher in 2025?

Cognizant Technology Solutions CTSH is expanding its AI footprint through strategic acquisitions and a rich partner base. The company is now set to acquire 3Cloud, one of the largest independent Microsoft MSFT Azure service providers and a global leader in Azure-dedicated AI enablement solutions, a move that strengthens CTSH’s position as a reliable partner for enterprise AI readiness and digital transformation. The 3Cloud acquisition will add more than 1000 Azure experts and engineers and over 1,500 Microsoft certifications to Cognizant's capabilities.

The latest deal expands Cognizant’s Azure portfolio as well as clientele in banking and financial services, healthcare, technology, and consumer sectors, currently served by 3Cloud. 3Cloud has achieved a 20% organic CAGR since 2020, and it is expected to grow more than 20% this year, supported by strong demand for Microsoft Azure–driven business transformation. Microsoft’s Azure and other cloud services revenues jumped 39% year over year (up 35% in constant currency) in the fourth quarter of 2025.

Acquisitions have been shaping Cognizant’s growth trajectory. Over the trailing nine months of 2025, recent acquisitions added about 350 bps to revenue growth, which rose 7.6% year over year to $1.12 billion. CTSH anticipates that inorganic growth will add about 250 bps to its 2025 revenue growth, which is now expected to range from 6% to 6.3% in constant currency.

CTSH shares have appreciated 8.9% over the past month, outperforming the Zacks Computers – IT Services industry’s decline of 3% and the broader Zacks Computer and Technology sector’s deterioration of 0.6%.

Cognizant Technology Solutions Corporation Price and Consensus

Cognizant Technology Solutions Corporation price-consensus-chart | Cognizant Technology Solutions Corporation Quote

Rich Partner Base, AI Investments to Aid CTSH’s Prospects

Cognizant’s expanding partner base, which includes the likes of Anthropic, Rubrik, Pearson and others, has been a key catalyst. The company is integrating Anthropic’s tools, including Claude for Enterprise, Claude Code, Model Context Protocol (“MCP”) and Agent SDK. This integration will help clients embed AI into their existing data and applications, enabling them to manage performance, risk, and spending more effectively.

In the third quarter of 2025, Cognizant inked six large deals with total control value (TCV) of $100 million or more, which brought the year-to-date total to 16. Cognizant’s operating margin (up 70 basis points year over year in the third quarter of 2025) is benefiting from disciplined spending as well as an increasingly AI-enabled delivery model. CTSH expects 2025 adjusted operating margin to be approximately 15.7%, indicating an increase of 40 basis points from the 2024 level.

AI-led productivity is driving digital transformation for enterprises. CTSH developers’ productivity improved in the third quarter of 2025, as roughly 30% of its internal code was AI-generated — a figure Cognizant expects to reach 50% in the years ahead. Cognizant has embedded AI across more than 150 use cases — from finance and operations to sales enablement and contract pricing — that streamline decision-making, improve accuracy, and accelerate cycle times.

Cognizant’s strong portfolio, strategic acquisitions and an expanding partner base are expected to drive top-line growth in the near term. The company expects fourth-quarter 2025 revenues to be between $5.27 billion and $5.33 billion, indicating growth of 3.8-4.8% on a reported basis and an increase of 2.5-3.5% at cc.

The Zacks Consensus Estimate for fourth-quarter 2025 revenues is pegged at $5.31 billion, indicating year-over-year growth of 4.43%. The consensus mark for earnings is pegged at $1.32 per share, which has increased a penny over the past 30 days. The figure implies a year-over-year increase of 9.09%.

Zacks Rank & Other Stocks to Consider

Cognizant currently has a Zacks Rank #2 (Buy).

A couple of other top-ranked stocks in the industry are Fair Isaac FICO and Vertiv VRT, both currently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Fair Isaac’s first-quarter fiscal 2026 earnings is pegged at $7 per share, down 4 cents over the past 30 days, implying year-over-year growth of 20.9%.  Fair Isaac shares have appreciated 7.4% over the past month.

The Zacks Consensus Estimate for Vertiv’s fourth-quarter 2025 earnings is pegged at $1.28 per share, up 4 cents over the past 30 days, indicating a year-over-year increase of 29.29%. Vertiv shares have declined 2.7% over the past month.

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This article originally published on Zacks Investment Research (zacks.com).

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