Globant is the IBD Stock of the Day ahead of the information technology consulting and service firm's earnings report next week. GLOB stock has gained 43% over the past 52 weeks amid buzz over generative artificial intelligence.
On the stock market today, Globant stock dipped 2.5% to close at 243.38. GLOB stock on Friday tried to clear a 250.39 buy point from a flat base/base-on-base pattern. But it closed below the entry point. On Monday, GLOB stock fell amid a broad market sell-off.
Globant is scheduled to report earnings Feb. 15. Investors may want to be cautious ahead of the report. One strategy around earnings would be to use call options.
That approach would let investors cap their possible loss while still letting them participate in any post-earnings upside.
The emergence of generative AI has been a plus for IT consulting and services firms like Luxembourg-based Globant and Accenture. Many companies are looking to put generative AI and ChatGPT-like capabilities to work but lack the in-house expertise to do so on their own.
And, most companies need to learn about the large language models behind gen AI. Companies are racing to develop customized AI for specific industries using their own proprietary data to train AI models.
In early January, Globant issued a tech trends report on the likely impact of gen AI as well as quantum computing.
Globant Stock: AI Opportunity
TD Cowen analyst Bryan Bergin said Globant seized upon the gen AI opportunity in 2023.
"Globant X is the company's AI products and platforms division with a portfolio currently comprised of nine separate proprietary offerings, spanning augmented software development, workplace engagement and testing and process optimization," Bergin said in a note to clients. "These products leverage AI/automation for higher productivity and seamless digital experiences."
Globant's third-quarter adjusted profit rose 16% to $1.48 per share. Revenue rose nearly 19% to $545.3 million.
Globant garners about 22% of revenue from media and entertainment industry customers. Roughly 19% of revenue comes from financial services customers and 16% from consumer and retail customers.
William Blair analyst Maggie Nolan said in her note to clients: "Globant's data and AI studio became a top 10 studio in 2023. The company has generated $100 million in revenue in the nine months ended Sept. 30, 2023, for projects that contain AI components."
Nolan added: "Globant has roughly a decade's worth of work in AI and almost just as many platforms to show for it. In addition, Globant's five-year, $1 billion investment plan announced in August includes evolving the company's AI-powered platforms."
GLOB Stock: Technical Ratings
Globant stock holds a best-possible IBD Composite Rating of 99, according to IBD Stock Checkup.
IBD's Composite Rating combines five separate proprietary ratings into one easy-to-use rating. Also, the best growth stocks have a Composite Rating of 90 or better.
Further, Globant stock has an Accumulation/Distribution Rating of A-plus. That rating analyzes price and volume changes in a stock over the past 13 weeks of trading. Its current rating indicates more funds are buying than selling.
The rating, on a scale of A+ to E, measures institutional buying and selling in a stock. A+ signifies heavy institutional buying; E means heavy selling. Think of the C grade as neutral.
Follow Reinhardt Krause on X, formerly called Twitter, @reinhardtk_tech for updates on artificial intelligence, cybersecurity and cloud computing.
