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Shares of Information Technology (IT) companies gained attention in Thursday’s (February 6) session following a strong Q4 performance from Nasdaq-listed Cognizant
IT Stocks Rise In A Weak Market
Shares of Information Technology (IT) companies gained attention in Thursday’s (February 6) session following a strong Q4 performance from Nasdaq-listed Cognizant Technology Solutions, which exceeded analyst expectations and projected stronger growth for CY2025.
Boosted by Cognizant’s optimistic outlook, the Nifty IT index traded in the green, despite overall market weakness. By around 12 PM, the Nifty IT index was up by 0.29%. Out of the 10 stocks in the Nifty IT index, 7 were in the positive territory, with Persistent Systems and Coforge leading the gains, followed by Tech Mahindra, Infosys, and HCL Technologies.
Cognizant Projects Strong Growth for 2025, Posts Strong Q4 Results
Cognizant has projected revenue growth between 3.5% and 6% in constant currency for 2025, marking a significant improvement over the 1.9% growth in 2024. The company ended 2024 on a high, with Q4 revenue reaching $5.1 billion, reflecting a 6.7% year-on-year increase and exceeding the upper end of its growth guidance.
Net income for Q4 rose 2.1% year-on-year to $558 million, though it saw a 4.1% decline sequentially. CEO Ravi Kumar S attributed the strong performance to the company’s strategic execution and robust deal pipeline, highlighting that Cognizant closed a record 29 large deals in 2024.
Regionally, Cognizant’s North America business led with an 8.4% YoY growth in Q4CY24. Europe posted a 1.3% growth, while the rest of the world saw a 3.9% increase.
By industry vertical, health sciences saw a 10.4% surge, financial services grew by 2.8%, and communications, media, and technology rose by 0.4%. The products and resources segment notably stood out with an 11.3% growth.
Cognizant’s leadership remains optimistic about a recovery in discretionary IT spending, which could create a more balanced mix of short-term projects and large-scale deals in 2025. CFO Jatin Dalal emphasized, “We are seeing some discretionary spend return, and therefore the growth in 2025 will be a mix of short-term work and long-term contracts,” reinforcing the company’s positive outlook.
