IT Companies suppliers have been experiencing low demand amid macroeconomic uncertainty, with not many shares within the sector providing near-term upside to consensus figures. In opposition to this backdrop, analysts at Guggenheim shared in a notice this week an inventory of the Greatest IT Companies shares to personal for 2024.

They famous that the mushy near-term demand is a results of “deprioritized discretionary spend,” including that the decreased spending is obvious “notably throughout transformation-oriented discretionary agendas as enterprises shifted funds priorities towards outsourcing-reliant value optimization.”

Regardless of this, Guggenheim stays constructive on the medium-term alternatives, anticipating cyclical headwinds to clear and AI-driven expertise to begin opening up new areas of development.

“We imagine we’re within the early innings of an AI-driven expertise cycle. IT Companies suppliers are sometimes “tip of spear” for innovation, as these listed to consulting capabilities assist plan, roadmap, develop, and implement new expertise for enterprise prospects,” they mentioned.

The analysts additionally anticipate acquisitions to be key throughout this part, and are most optimistic about shares providing development upside and publicity to discretionary spend.

One of the best IT Companies shares to personal based on Guggenheim are Accenture (NYSE:), Andava Ltd. (DAVA), EPAM Techniques (EPAM) and Globant (GLOB). Every of those has a Purchase ranking on the agency, whereas DAVA is moreover a ‘Greatest Thought.’

“[W]e anticipate these firms to higher seize secularly-driven demand restoration. Every can be adept at systematic tuck-in acquisitions, repeatedly pivoting functionality units to satisfy demand,” mentioned the analysts.

Right here’s why these shares are Buys at Guggenheim.

Accenture (worth goal $425): “We see ACN as among the many best-positioned to seize secular demand themes given its end-to-end service choices, investments forward of demand traits, and sturdy capital allocation framework balancing acquisitions and shareholder return.”

Andava (worth goal $60): The inventory “presents a shopping for alternative in a high-quality digital pure-play well-positioned to profit from return of discretionary spend.”

EPAM (worth goal $350): “Regardless of near-term uncertainty, we imagine EPAM is among the many best-positioned to profit from demand restoration given its give attention to digital enablement.”

Globant (worth goal $250): “A Latin American-based digital pure-play exhibiting resilience amidst macroeconomic uncertainty, GLOB has demonstrated the strengths and differentiation of its buyer relationships and Studio mannequin, which we imagine will proceed to underpin double-digit development within the medium time period.”