Cognizant Stock Rallies on Strong AI Push, Expanding Clientele

Cognizant Technology Solutions CTSH shares have rallied 19% in the past three months, outperforming the Zacks Computers IT Services industry’s decline of 3.6% and the broader Zacks Computer and Technology sector’s appreciation of 2.5%. CTSH is benefiting from its investments in AI, which is driving expansion across enterprises. In the third quarter of 2025, CTSH signed six large deals, each with a total contract value (TCV) of $100 million or more, bringing the cumulative year-to-date total to 16. Trailing 12-month bookings grew 5% year over year. The TCV of Cognizant’s large deals grew 40% year over year. 

Cognizant’s focus lies on AI-led productivity, industrializing AI and agentifying the enterprise. AI-driven productivity is helping customers accelerate software development and lower costs. In the third quarter of 2025, AI generated roughly 30% of CTSH’s internal code, and expects it could reach 50% in the years ahead. The launch of Cognizant Enterprise Vibe Coding Blueprint is helping clients develop AI fluency across their teams. 

CTSH has embedded AI across more than 150 use cases, ranging from finance and operations to sales enablement and contract pricing, which is streamlining decision-making, improving accuracy and accelerating cycle times. The Flowsource platform, which integrates generative and agentic AI across the full software development life cycle, was used by more than 70 clients with an additional 120 in the pipeline

CTSH Initiates Strong Q4 & 2025 Guidance

Cognizant expects fourth-quarter 2025 revenues between $5.27 billion and $5.33 billion, indicating growth of 3.8-4.8% and an increase of 2.5-3.5% on a constant-currency (cc) basis. The Zacks Consensus Estimate for revenues is currently pegged at $5.31 billion, suggesting 4.4% growth over the figure reported in the year-ago quarter.

Cognizant Technology Solutions Corporation Price and Consensus

 

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

For 2025, revenues are expected to be $21.05-$21.10 billion, implying an increase of 6.6-6.9% on a reported basis and growth of 6-6.3% on a cc basis. The Zacks Consensus Estimate for 2025 is currently pegged at $21.06 billion, suggesting 6.7% growth over the figure reported in 2024.

Adjusted earnings for 2025 are expected between $5.22 and $5.26 per share.

CTSH’s Earnings Estimate Revision Trend Positive

The Zacks Consensus Estimate for Cognizant’s fourth-quarter 2025 earnings is pegged at $1.32 per share, up by a penny over the past 60 days, indicating growth of 9.1% from the figure reported in the year-ago quarter. 

The consensus mark for Cognizant’s 2025 earnings is pegged at $5.25 per share, up 9 cents over the past 60 days, implying growth of 10.5% from the figure reported in 2024.

Zacks Rank & Other Stocks to Consider

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

Some other top-ranked stocks in the broader Zacks Computer and Technology sector are Advanced Energy Industries AEIS, Digital Turbine APPS and Kimball Electronics KE, each of which currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth rates for Advanced Energy Industries, Digital Turbine and Kimball Electronics are currently pegged at 33.4%, 42.4% and 20%, respectively. Shares of Advanced Energy Industries have appreciated 26.8%, whereas shares of Digital Turbine and Kimball Electronics Systems have declined 7.8% and 11.6%, respectively, over the past three months.

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

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