ACN

IBM (IBM) ended trading Tuesday down more than 25%, its worst drop since at least 1968, after the company preannounced earnings that fell well below Wall Street's expectations. Big Blue attributed the results to customers shifting spending away from software and mainframe products and toward AI servers and memory. Analysts had expected IBM to report adjusted earnings per share (EPS) of $3.02 on revenue of $17.86 billion, but the company came up short, posting adjusted EPS of $2.93 and revenue of $17.2 billion. In a statement, IBM CEO Arvind Krishna said the company was prepared for a low-single-digit decline in its z17 mainframe business for the quarter, but the results were far worse than projected and are at least partially related to the global memory shortage. "In the last few weeks of June, we saw clients shift their quarterly [capital expenditures] spend toward servers, storage, and memory purchases to secure supply-constrained infrastructure ahead of expected price increases," Krishna said. "This dynamic impacted client buying patterns. While we anticipated some supply chain related impact in our expectations, we did not anticipate the magnitude of the capex reprioritization," he added. IDC's Ashish Nadkarni, who leads the firm's enterprise infrastructure global research group, wrote in a note that Wall Street's reaction to Krishna's warning was likely stronger than warranted, but that investors shouldn't dismiss his statement. "It may not mean the collapse of the mainframe business, but it does mean that IBM is not isolated from the strategic reallocation of enterprise budgets in order to address the acceleration of AI adoption," he explained. IBM stock was previously off just 4.8% since the start of the year heading into Tuesday, but it is now off 26%. The company's chief competitors aren't faring much better. Shares of Oracle (ORCL) are off 33% year to date, while Microsoft has declined 20%. Accenture (ACN), meanwhile, is down 50%. IBM will hold its quarterly earnings call on July 22. Email Daniel Howley at [email protected]. Follow him on X at @DanielHowley. Click here for the latest technology news that will impact the stock market. Read the latest financial and business news from Yahoo Finance

Software stocks were hammered after IBM preannounced weaker-than-expected Q2 financial results. Shares in IT services firms also fell.

International Business Machines (NYSE:IBM), an enterprise software, consulting, and mainframe infrastructure provider, closed at $217.05, down 25.21%. The stock plunged after IBM issued a preliminary second-quarter warning, and investors are watching July 22 results for more details.Trading volume reached 64.0 million shares, coming in about 551% above its three-month average of 9.8 million shares. The S&P 500 (SNPINDEX:^GSPC) rose 0.38% to 7,544, while the Nasdaq Composite (NASDAQINDEX:^IXIC) added 0.90% to 26,107. Among technology hardware, software, consulting, and IT services peers, Accenture (NYSE:ACN) fell 2.86% to $134.56 and DXC Technology (NYSE:DXC) dropped 5.66% to $9.16 as budget pressure and weaker consulting demand stayed in focus. IBM’s stock had its worst day in the company's 115-year history after its surprise Q2 warning. The company said customers have shifted IT budgets away from its software and infrastructure offerings, focusing on artificial intelligence (AI) hardware to ensure adequate supply. IBM CEO Arvind Krishna noted that server and memory purchases are now priorities. He also stated that “rapidly-evolving, industry-wide cybersecurity concerns” are attracting more attention. Investors took that cue to unload IBM stock and load up on cybersecurity and AI hardware names. IBM had been a beneficiary of the AI trade, with shares more than doubling over the last three years. But now it seems to be the wrong place for new money. Investors can also take this news as affirmation that AI infrastructure names likely have more upside ahead. Before you buy stock in International Business Machines, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and International Business Machines wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $398,160!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,249,202!* Now, it’s worth noting Stock Advisor’s total average return is 918% — a market-crushing outperformance compared to 209% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and j...

Investing.com -- Software stocks fell sharply Tuesday as disappointing preliminary results from IBM (NYSE:IBM) rippled across the sector, pulling shares of major software companies lower. "The IBM update will deliver a devastating blow to software/services stocks as investors will worry about the capex pivot negatively impacting the whole industry, but the race to secure hardware raises its own set of worries," Vital Knowledge analyst Adam Crisafulli said in a quick comment. Following IBM’s update, investors reacted sharply to the cooling sentiment in the broader software space: Accenture (NYSE:ACN): Fell 7% ServiceNow (NYSE:NOW): Dropped 8% Workday (NASDAQ:WDAY): Declined 9.7% Salesforce (NYSE:CRM): Slipped 6% Atlassian Corp Plc (NASDAQ:TEAM): Fell 8.3% SAP SE ADR (NYSE:SAP): Sank 5.5% Adobe NASDAQ:ADBE): Fell 6.1% The decline is rooted in a fundamental shift in enterprise capital expenditure (capex) caused by a global memory supply shortage. Here is why this dynamic is specifically hurting software stocks: Capex Reprioritization: IBM reported that, toward the end of June, its clients—facing a supply-constrained market—shifted their spending away from software and general-purpose IT to "lock in" hardware like servers, storage, and memory. Because memory prices have spiked—exacerbated by intense demand from AI data centers—enterprises are exhausting their budgets just to secure critical hardware. The AI Tax on Enterprise Budgets: The industry is currently experiencing a "structural" memory shortage. Hyperscalers and AI infrastructure providers are consuming the vast majority of high-bandwidth memory (HBM) and DRAM production. As a result, when enterprises do manage to secure hardware, they are paying significantly higher premiums, leaving less room in their annual budgets for software renewals, licensing, or new digital transformation projects. Short-Term Revenue Headwinds: Investors are concerned that this is not an isolated issue for IBM. If large enterprise clients are delaying software purchases to prioritize hardware inventory—a trend referred to as "capex reprioritization"—it suggests a near-term revenue slowdown for the entire software-as-a-service (SaaS) and consulting sector. IBM’s revenue of $17.2 billion missed the $17.86 billion consensus, with non-GAAP EPS of $2.93 falling short of the $3.02 estimate. Beyond the hardware buying shift, the compan...

FactSet Research Systems Inc. FDS has reported third-quarter fiscal 2026 adjusted earnings of $4.53 per share, beating the Zacks Consensus Estimate of $4.44 by 2%. The figure increased 6.1% from the year-ago quarter. Revenues of $622.9 million surpassed the consensus mark of $617.2 million by 0.9% and rose 6.4% year over year. Organic revenues grew 7%, while organic ASV rallied 7.1% to $2.49 billion. FactSet Research Systems Inc. price-consensus-eps-surprise-chart | FactSet Research Systems Inc. Quote FactSet’s top line benefited from continued demand across institutional buy-side and wealth management clients. Organic revenues were $622.9 million, up from $582.2 million in the prior-year period. The company’s revenue growth reflected stronger client engagement and expanding enterprise relationships. Management noted that clients continued to choose FactSet for differentiated content, analytics and workflow solutions. Annual Subscription Value, or ASV, was $2.48 billion as of May 31, 2026, compared with $2.34 billion a year ago. Organic ASV came in at $2.49 billion, increasing $165 million year over year. Organic ASV increased $35.4 million over the past three months. FactSet’s annual ASV retention remained above 95%, while enterprise renewals in the quarter extended 30% in length on average. Revenues from the Americas were $407.2 million in the third quarter of fiscal 2026, up 7% on an organic basis from the year-ago quarter. The region remained FactSet’s largest revenue contributor, supported by an ASV base of $1.62 billion. EMEA revenues were $152 million, with organic revenue growth of 5.3%. The Asia Pacific revenues rose 10.5% organically to $63.7 million, whereas organic ASV growth in the region was 10%, the strongest among FactSet’s reported regions. Adjusted operating income was $211.8 million, down 1.7% from the prior-year quarter. The adjusted operating margin contracted to 34% from 36.8% a year earlier. The margin decline reflected higher compensation and technology-related expenses. The GAAP operating margin was 26.7%, down from 33.2% due to higher employee compensation costs, including one-time charges and CEO compensation costs. FactSet generated $284.5 million in net cash from operating activities during the quarter, up 12.1% year over year. The free cash flow increased 11.1% to $254 million. The company returned $243.4 million to shareholders...

Sandisk and Micron maintained their aggressive momentum, contrasting with slumping consulting stocks and a lagging animal health company.

FactSet Research Systems Inc. FDS is set to report third-quarter fiscal 2026 results on July 1, before market open. FDS surpassed the Zacks Consensus Estimate in two of four quarters and missed twice, delivering an average surprise of 0.4%. FactSet Research Systems Inc. price-eps-surprise | FactSet Research Systems Inc. Quote The consensus mark for FDS’s third-quarter fiscal 2026 revenues is pinned at $617.2 million, a 5.4% jump from the year-ago quarter’s reported figure. The top line is expected to have been driven by an improvement in revenues across every region. On a geographical basis, we expect the company to generate $401.4 million in revenues in the Americas. The figure is expected to increase 5.5% from the year-ago quarter. Strength in asset management, fueled by trading and middle-office solutions, and an increase in new business logos, supported by hedge funds and corporates, are likely to have boosted revenues in this region. Our projection for revenues from EMEA is at $148.6 million, moving up 1.9% from the year-ago quarter’s reported figure. The improvement in revenues in EMEA can be attributed to robust demand for data solutions in wealth and competitive managed services wins. Revenues from the Asia-Pacific region are estimated to increase 7.7% year over year. The figure is set at $63.9 million. Strength in demand from asset managers and hedge funds for middle office and trading solutions, combined with higher banking retention, is anticipated to have supported top-line growth in this region. The consensus mark for earnings is at $4.44 per share, indicating a 4% rise on a year-over-year basis. We expect the company to have imposed prudent expense management that led to the bottom-line enhancement. Our proven model does not conclusively predict an earnings beat for FactSet this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that is not the case here. You can uncover the best stocks before they are reported with our Earnings ESP Filter. FDS has an Earnings ESP of -1.85% and a Zacks Rank of 2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here. Paychex, Inc. PAYX reported solid fourth-quarter fiscal 2026 results, with adjusted earnings beating the Zacks Consensus Estimate and revenues coming in line. Adjusted earn...

Backed by bullish positioning from 64 hedge funds and analyst expectations of 43.40% upside, Accenture plc (NYSE:ACN) ranks among the top stocks to buy for financial stability. With analysts reassessing near-term growth expectations, Accenture plc (NYSE:ACN) has faced pressure following a softer outlook, even as the company accelerates its expansion in cybersecurity and positions itself for growing enterprise AI adoption. The latest analyst action came on June 23, 2026, when Mizuho lowered its price target on Accenture plc (NYSE:ACN) to $226 from $280 while maintaining an “Outperform” rating. The firm said the company’s fiscal third-quarter results and updated fiscal 2026 guidance fell short of expectations. Mizuho also noted that bookings growth slowed for a second straight quarter but added that Accenture plc (NYSE:ACN)’s longer-term outlook appears better than initially feared, citing the company’s role as a trusted partner for enterprises implementing AI solutions. That update followed Accenture plc (NYSE:ACN)’s June 18, 2026 announcement of $4.18 billion in cybersecurity acquisitions, including a majority stake in Dragos, an OT cybersecurity technology provider, and the full acquisition of runZero, an asset intelligence and exposure assessment company, and NetRise, a cybersecurity company focused on device security and software supply chain security. The deals, which are expected to close in August or September, subject to regulatory approvals, will add $208 million in combined annual recurring revenue and expand Accenture plc (NYSE:ACN)’s $10 billion cybersecurity business. Despite the acquisitions, investors focused on weaker guidance. Accenture plc (NYSE:ACN) lowered its expected annual revenue growth range to 3% to 4% from 3% to 5% and projected fourth-quarter revenue of $17.75 billion to $18.40 billion, below the analyst consensus of $18.47 billion. Third-quarter bookings fell about 2% year-over-year to $19.3 billion, while revenue rose 6% to $18.72 billion, slightly below expectations of $18.75 billion. Accenture plc (NYSE:ACN) is a global professional services and technology consulting company. It helps enterprises implement digital transformation, cloud computing, artificial intelligence, and enterprise software solutions at scale. While we acknowledge the potential of ACN as an investment, we believe certain AI stocks offer greater upside poten...

Accenture’s second-quarter performance was met with a sharp negative market reaction, as investors digested a combination of steady revenue growth and cautious commentary around external disruptions. Management highlighted that broad-based client demand and expanding AI initiatives fueled growth across all regions and service lines. However, CEO Julie Sweet noted that the Middle East conflict and resulting client hesitancy in discretionary spending weighed on consulting revenues, particularly in the final weeks of the quarter. The company also pointed to the deferral of large managed services contracts into next year, contributing to uncertainty. Sweet explained, “We saw a revenue impact of approximately $100 million compared to our expectations, which was all consulting type of work.” Is now the time to buy ACN? Find out in our full research report (it’s free). Revenue: $18.72 billion vs analyst estimates of $18.8 billion (5.6% year-on-year growth, in line) EPS (GAAP): $3.80 vs analyst estimates of $3.70 (2.8% beat) Revenue Guidance for Q3 CY2026 is $18.08 billion at the midpoint, below analyst estimates of $18.5 billion Operating Margin: 17%, in line with the same quarter last year Market Capitalization: $102.8 billion While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention. Bryan Keane (Citi): Asked about the impact and duration of Middle East-related revenue headwinds; CEO Julie Sweet indicated continued uncertainty and that more of the guidance range is in play for next quarter. Tien-Tsin Huang (JPMorgan): Inquired about integration risk and strategic rationale for the OT cybersecurity acquisitions; Sweet clarified that the acquisitions create a unified platform, reducing complexity for clients, and are aimed at long-term growth rather than immediate revenue. Jason Kupferberg (Wells Fargo): Questioned the disconnect between strong consulting bookings and softer consulting revenue; CFO Angie Park explained that the shortfall was largely due to late-quarter Middle East disruptions and expects some recovery in the coming quarter. Kevin McVeigh (UBS): Sought clarification on the contribution from acquisitions and the impact...

Paychex, Inc. PAYX has reported solid fourth-quarter fiscal 2026 results, with adjusted earnings beating the Zacks Consensus Estimate and revenues coming in line. Adjusted earnings of $1.32 per share surpassed the consensus estimate of $1.31 by a slight margin and increased 10.9% from the year-ago quarter. Total revenues of $1.61 billion rose 12.5% year over year and beat the consensus estimate by a slight margin. The earnings upside was backed by segment growth, Paycor contributions and disciplined expense performance. Management Solutions led the quarter, while PEO and Insurance Solutions, and client fund interest added further support. Paychex, Inc. price-consensus-eps-surprise-chart | Paychex, Inc. Quote Management Solutions’ revenues increased 14% year over year to $1.18 billion in the fiscal fourth quarter. The segment benefited from higher product penetration and growth in client worksite employees within Human Resources Solutions. Paycor, acquired in April 2025, contributed about 8 percentage points to Management Solutions revenue growth. The acquisition also supported price realization and higher revenues per client, reflecting Paycor’s upmarket client base. Management noted that the quarter included a full period of Paycor revenues and expenses compared with a partial period in the prior-year quarter. That comparison helped drive the sharper contribution from the acquired business in the latest quarter. Professional Employer Organization and Insurance Solutions revenues were $369.7 million, up 9% from the year-ago quarter. Growth in the number of average PEO worksite employees supported the segment’s performance. PEO insurance revenues also increased during the quarter. Interest on funds held for clients rose 15% to $52.2 million, driven by higher average investment balances resulting from the Paycor acquisition. Total service revenues came in at $1.55 billion, up 12% from the year-ago period. The broad advance across core services showed that growth was not confined to one operating line. Total expenses were relatively flat year over year at $1 billion. Increases in compensation-related expenses, amortization of intangible assets, technology investments, selling initiatives and marketing spending were offset by lower acquisition-related compensation and professional service costs. Operating income rose 40% to $604.7 million. The operating margin e...

Paychex, Inc. PAYX will release fourth-quarter fiscal 2026 results on June 24, before market open. PAYX’s earnings outperformed the Zacks Consensus Estimate in four preceding quarters, with an average earnings surprise of 1.3%. Paychex, Inc. price-eps-surprise | Paychex, Inc. Quote The consensus estimate for Paychex’s fourth-quarter fiscal 2026 revenues is set at $1.6 billion, hinting at a 12.3% jump from the year-ago quarter. For the management solutions segment, we anticipate the company to generate $1.2 billion, suggesting 15% growth from the year-ago quarter. The rise is likely to have been driven by product penetration and price realization. Revenues for the PEO and insurance solutions are set at $360.4 million. The figure is expected to increase 5.9% from the year-ago quarter’s actual. Robust rallies in the average number of PEO worksite employees and PEO insurance revenues are anticipated to have aided this segment. For the interest on funds held for clients, the estimated revenues are $45.6 million, rising marginally year over year. The increment in this segment is can be attributed to the addition of Paycor balances. The Zacks Consensus Estimate for earnings is pinned at $1.31 per share, indicating a 10.1% gain from the year-ago quarter’s reported figure. Widening margins due to productivity and prudent expense management are the anticipated factors to have improved the bottom line. Our proven model does not conclusively predict an earnings beat for Paychex this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that is not the case here. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter. PAYX has an Earnings ESP of -1.65% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here. Accenture plc ACN reported third-quarter fiscal 2026 earnings of $3.80 per share, beating the Zacks Consensus Estimate by 2.7%. The metric increased 9% from the year-ago quarter. ACN’s revenues of $18.718 billion missed the consensus mark by 0.4% but rose 6% year over year in U.S. dollars and 3% in local currency. Fiserv, Inc. FISV reported first-quarter 2026 adjusted earnings of $1.79 per share, beating the Zacks Consensus Estimate of $1.57 by 14%. Adjusted earnings declined 16.4% from the y...

Accenture (ACN) came out with quarterly earnings of $3.8 per share, beating the Zacks Consensus Estimate of $3.7 per share. This compares to earnings of $3.49 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +2.66%. A quarter ago, it was expected that this consulting company would post earnings of $2.86 per share when it actually produced earnings of $2.93, delivering a surprise of +2.45%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. Accenture, which belongs to the Zacks Computers - IT Services industry, posted revenues of $18.72 billion for the quarter ended May 2026, missing the Zacks Consensus Estimate by 0.37%. This compares to year-ago revenues of $17.73 billion. The company has topped consensus revenue estimates three times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Accenture shares have lost about 41.9% since the beginning of the year versus the S&P 500's gain of 8.4%. While Accenture has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Accenture was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stock...