UBS Backs Accenture: OpenAI's AI Deployment Move Not a Threat, Stock Dip Seen as Opportunity

Deep News05-12

OpenAI's announcement last Sunday to form "OpenAI Deployment" and acquire AI engineering firm Tomoro has raised market concerns about the competitive landscape in the IT consulting sector. Shares of Accenture PLC fell nearly 3% intraday on Monday, with Cognizant and Infosys declining approximately 5% and 4%, respectively.

However, UBS analyst team disagrees with this sell-off. In a report issued Monday, analysts including Kevin McVeigh reaffirmed their "Buy" rating on Accenture and maintained a $320 price target. UBS noted that OpenAI's acquisition of Tomoro adds only about 150 engineers. In contrast, Accenture boasts a workforce exceeding 700,000, with 300,000 to 400,000 being engineers and delivery personnel. This scale disparity means OpenAI lacks the global footprint and operational infrastructure required to independently execute complex, multi-year AI projects.

UBS further analyzed that the "ambition" in the AI deployment field is expanding the total addressable market for AI services faster than the market's internal digestion capacity. As a leading systems integrator, Accenture, with its enterprise-grade execution capabilities, is positioned to be a primary beneficiary capturing incremental AI-related work. The report anticipates that Accenture's contract value with emerging AI partners such as Anthropic, Databricks, NVIDIA, and OpenAI could more than double.

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Comments

  • a4xrbj1
    05-13 21:41
    a4xrbj1
    UBS is almost 50% under their target price. While I certainly don't agree with the sell off from Accenture, they, especially the highest paid female CEO need to really get their act together in terms of managing WS analysts and institutional investors . Quite frankly, Julie Sweet has to go IMO. The team she put together is crap, just a bunch of bla bla talkers that can't get their shit together. Total revamp is needed, their new AI driven strategy is the result of a circle jerk of the Strategy guys. Company is making good money and grows 7-8% still, deserves a turnaround.
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