Investment firm Jefferies has upgraded Epam Systems' stock from 'Hold' to 'Buy' and raised its price target to $237 from $202. The upgrade is based on the belief that AI will be a major catalyst for the company. Jefferies analysts expect Epam Systems to be well-positioned to capitalize on AI and become one of the top beneficiaries of generative AI. They anticipate that Gen-AI will contribute an incremental +500-1,000 basis points to annual organic growth for the company in the next three to five years. However, meaningful revenue boost from Gen-AI is not expected until at least the second half of 2025. Jefferies also noted signs that demand for IT services may be troughing and that demand is unlikely to meaningfully decline from current levels [baa2bf31].
This upgrade comes as Epam Systems' stock jumped following the announcement. The company's stock is currently trading at $225.50, with a year-to-date return of 18.5%. The average Wall Street analysts' rating for Epam Systems is [average rating]. With Jefferies' upgraded rating and price target, investors are optimistic about the company's potential for growth in the AI-driven market [baa2bf31].
It is worth noting that Epam Systems is not the only company in the market that is exploring the potential of AI. Many other major players, such as eBay and Amazon, have also been investing heavily in AI technology to improve their platforms and gain a competitive edge. However, Jefferies' upgraded rating and price target indicate that Epam Systems is well-positioned to capitalize on the opportunities presented by AI [baa2bf31].
In conclusion, Jefferies' upgrade of Epam Systems' stock rating reflects the belief that AI will be a major catalyst for the company's growth. With the potential benefits of AI integration and the increasing importance of AI in the market, Epam Systems' stock may be poised for significant growth in the coming years. As the company focuses on capitalizing on AI, investors are optimistic about its potential in the AI-driven market. However, the meaningful revenue boost from Gen-AI is not expected until at least the second half of 2025, and investors should consider this timeline when making investment decisions [baa2bf31].