Cognizant outpaces TCS, Infosys; stock takes off despite demand gloom

Published 29 July 2026 · finance

Cognizant Technology Solutions Corp. is bracing for a slower 2026, with the delayed revival of non-essential technology spending prompting the company to cut its growth

Cognizant Technology Solutions Corp. is bracing for a slower 2026, with the delayed revival of non-essential technology spending prompting the company to cut its growth outlook to the lowest in more than a year. The Teaneck, New Jersey-based company, which grew 7% last fiscal year, had previously set a target of 7.3% for the current year. However, as clients continue to sit on the fence, the company cut its guidance to at best 5.9%, the lowest outlook since the final quarter of 2024, and underlining the demand challenge over the broader IT services sector. The Indian-heritage company, larger than Infosys in revenue, ended the June quarter with $5.48 billion in revenue, up 1.3% sequentially and 4.5% year over year. While it marginally missed analysts' revenue estimate of $5.49 billion, investors cheered Cognizant's earnings with its shares soaring 11% at noon on Nasdaq, as the company beat peers Tata Consultancy Services Ltd (TCS) and Infosys. Net profit fell 3.9% from the preceding quarter to $636 million. Cognizant follows a January-December fiscal year. Guarded In its comments on the demand outlook, the management was guarded. “We delivered these results against the cautious demand environment, while growing at the top of our peer group. While we expect that caution to persist in the near term, AI is driving fundamental change in our industry that we believe creates significant long-term growth opportunities,” chief executive Ravi Kumar said at a post-earnings analysts' call.

Much of Cognizant's growth came from financial institutions, which make up almost a third of its revenue. Revenue from financial institutions offset the decline in revenue from life sciences and healthcare, as well as the communication, media, and technology segment. Of the 5.9% growth targeted for 2026, a third is expected from acquisitions. “As we discussed on our last earnings call, our prior guidance range contemplated an improved discretionary spending environment at the midpoint. Instead, macro uncertainty has remained,” chief financial officer Jatin Dalal said during the call. In line For now, Cognizant's commentary aligns with the guidance issued by two of India's largest tech services firms. “I don’t know when this (macroeconomic environment) will change, because overall, many of the ongoing conflicts are continuing, and we also saw many situations of our clients wanting to defer some of the projects during the quarter,” TCS chief executive K. Krithivasan said during the company’s post-earnings analyst call on 9 July. “Overall, we continue to see the macro environment remaining uncertain,” said Salil Parekh, chief executive of Infosys, during the company’s post-earnings press conference on 23 July. TCS and Infosys ended the June quarter with $7.62 billion and $5.08 billion in revenue, respectively. While TCS’s revenue was unchanged from the previous quarter, Infosys’s revenue jumped 0.8% sequentially.