Wedbush Downgrades Globant as AI Erodes Business Model

Wedbush Securities downgraded Globant S.A. from Outperform to Neutral and reduced its price target from $54 to $37. The investment firm cited structural challenges as AI-driven processes compress the cost arbitrage model of Globant's legacy time-and-materials business. Wedbush analyst Steven Wahrhaftig based the new target on 2027 earnings per share estimates, noting that the company's transition to an outcome-based model has been slower than expected.

Globant reported second-quarter adjusted earnings per share of $1.40, missing the $1.50 consensus. The company provided third-quarter revenue guidance that fell significantly below analyst expectations, with fiscal 2026 projections expected to decline 0.4% year-over-year.

Other financial institutions also lowered their outlooks for the technology services firm. Needham reduced its price target to $45, citing foreign exchange headwinds in Latin America. UBS lowered its target to $43, noting the decline in 2026 revenue guidance and slower decision cycles among clients.