According to research firm Statista, the IT Services industry encompasses a broad range of services and products designed to help organizations manage and optimize their information and business processes. This industry includes managed services, security services, data management, consulting, and cloud computing, all of which play a critical role in today’s digital economy.
As businesses seek greater efficiency and smarter decision-making, IT service providers are increasingly integrating AI-driven solutions into their offerings. A mid-2024 Statista report projects that the IT Services market will generate $1.5 trillion in revenue by 2025, reflecting significant growth. Within this market, IT Outsourcing is expected to dominate, with a projected market size of $591 billion in the same year. Additionally, companies are accelerating their digital transformation initiatives to stay competitive, driving demand for IT consulting and implementation services. Statista forecasts this segment to reach $79 billion in 2025 and expand further to $93 billion by 2029, growing at a CAGR of 4.2% over the period.
The S&P 500 IT Services Index has experienced volatility compared to the broader S&P 500 benchmark index. Over the past 1-year, the IT Services sector has underperformed (8.4% return vs. 16.8% for the benchmark). However, over a three-year horizon, it has outperformed, highlighting the sector’s long-term resilience. While it may not generate the same excitement as semiconductors or software, IT Services remain closely linked to overall technology growth and continue to deliver steady returns.
IT service providers play a pivotal role in helping businesses streamline operations, enhance customer experiences, and maintain a competitive edge in an increasingly digital landscape. Organizations are also relying more on external expertise to navigate complex technological challenges, further boosting demand for IT services.
With this in mind, let’s take a closer look at the 10 best performing IT services stocks to buy according to analysts.
A team of Information Technology professionals creating complicated algorithms at their desks.
Our Methodology
To determine the 10 best performing IT services stocks to buy according to analysts, we began by screening all U.S.-listed IT Services companies with a market capitalization above $300 million, to eliminate smaller and more volatile stocks. Next, we sorted the companies based on their year-to-date (YTD) returns. Further, we selected companies which have a potential upside of 10% or more. Finally, we ranked the top 10 stocks based on YTD returns, placing the highest-performing ones at the top. Additionally, we also included data on hedge fund holdings in these companies as of Q4 2024 to provide further insight into investor interest.
Note: All pricing data is as of market close on February 28.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
10 Best Performing IT Services Stocks to Buy According to Analysts
10. N-Able Inc. (NYSE:NABL)
YTD returns: 7%
Potential Upside: 20%
Number of Hedge Fund Holders: 33
N-Able Inc. (NYSE:NABL) provides cloud-based software solutions designed for managed service providers (MSPs), helping them drive digital transformation and business growth for small and mid-sized enterprises. MSPs are companies that remotely oversee and maintain IT services and infrastructure for businesses, ensuring seamless operations.
In 2025, N-Able Inc. (NYSE:NABL) has seen a 7% increase in its share price, following a 30% decline in 2024. The company continues to benefit from rising investments in digital transformation, cybersecurity, and cloud computing by small and mid-sized businesses. As IT environments grow more complex, these businesses are expected to depend more on MSPs, which, in turn, will drive greater demand for the company’s software solutions.
In a January 21 update, RBC Capital analyst Matthew Hedberg projected in-line to slightly stronger results for the next quarter, following a solid Q3 2024 and the mid-quarter acquisition of Adlumin, which prompted an updated Q4 guidance. He remains optimistic about the broader sector and anticipates that conservative 2025 estimates could be revised upward as the year progresses. While maintaining an Outperform rating on N-Able Inc. (NYSE:NABL), he lowered his price target from $15 to $12, aligning with the current consensus price target, which suggests a potential upside of approximately 20%.
9. ExlService Holdings Inc. (NASDAQ:EXLS)
YTD returns: 9%
Potential Upside: 11%
Number of Hedge Fund Holders: 27
ExlService Holdings Inc. (NASDAQ:EXLS) is a global analytics and digital solutions company that helps businesses use data, technology, and automation to work more efficiently. They provide services like data analysis, artificial intelligence, and cloud-based solutions. The company mainly works with organization in insurance, healthcare, banking, retail, and utilities to improve their operations and decision-making.
ExlService Holdings Inc. (NASDAQ:EXLS)’s shares have gained 9% YTD, developing on its 2024 momentum where shares had gained 44%. The company has a strong presence in analytics, AI-driven automation, and business process outsourcing (BPO) which positions it as a key player in industries such as insurance, healthcare, and financial services. In its November 2024 Investor Presentation, the company highlighted the growth in its total addressable market (TAM) from $350 billion to $950 billion with the help of AI. To propel growth, ExlService Holdings Inc. (NASDAQ:EXLS) is focusing on driving its mix shift towards fast growing Data and AI-led business which constituted 51% of total revenue in 2023, up from 38% of total in 2020. With this shift, the company expects to post double-digit revenue growth next year.
The majority of analysts hold a Buy opinion on the stock and their 1-year median price target of $54 implies a 12% upside from current levels.
8. Kyndryl Holdings Inc. (NYSE:KD)
YTD returns: 10%
Potential Upside: 18%
Number of Hedge Fund Holders: 41
Kyndryl Holdings Inc. (NYSE:KD) is a leading IT infrastructure services provider specializing in the design, development, management, and modernization of complex enterprise IT systems. Previously a part of IBM (NYSE:IBM), the company was spun off in 2021. It offers a range of services, including cloud migration, networking, security, and data management, enabling businesses to enhance IT resilience and operational efficiency.
In 2024, Kyndryl Holdings Inc. (NYSE:KD) saw its share price surge by 67%, and its strong market positioning has continued to drive growth in 2025, with year-to-date (YTD) gains of over 10%. Leveraging its extensive expertise in managing complex IT environments, the company is well-positioned to capitalize on the accelerating demand for cloud migration and digital transformation among enterprises.
On February 3, the company reported its Q3 2025 earnings (fiscal year ending March), posting revenue of $3.74 billion, representing a 5% year-over-year (YoY) decline due to the divestiture of its SIS platform and the effect of optimization of legacy content within customer contracts. Despite the revenue dip, adjusted EBITDA for the quarter rose 14% YoY, while adjusted EPS improved to $0.51, a substantial improvement from a loss in the prior-year period.
Following the earnings announcement, analysts at Scotiabank commended Kyndryl Holdings Inc. (NYSE:KD) for its strong quarterly performance and reaffirmed their bullish stance on the company. They highlighted its solid execution, leadership position, and differentiated business model. While they reiterated their Outperform rating, they raised their price target on the stock from $35 to $45.
7. Ingram Micro Holding Corp. (NYSE:INGM)
YTD returns: 11%
Potential Upside: 30%
Number of Hedge Fund Holders: 24
Ingram Micro Holding Corp. (NYSE:INGM) is a global technology services company engaged in the distribution of IT products, cloud solutions, logistics, and other services worldwide. Catering to a vast network of resellers, vendors, and retailers, the company provides comprehensive solutions across hardware, software, and cloud computing.
The company experienced a challenging 2024, with its share price declining by over 21%. However, it has shown signs of recovery in 2025, gaining approximately 11% year-to-date. Operating on thin margins, Ingram Micro Holding Corp. (NYSE:INGM) reported an adjusted EBITDA margin of 2.8% and a net income margin of just 1.4% in its Q3 2024 results. In early December, the company announced a series of restructuring initiatives, including a workforce reduction of approximately 850 employees by the end of Q1 2025, a move aimed at driving earnings growth. Despite the competitive landscape, its strong reseller network and solid vendor relationships provide a stable foundation for long-term resilience.
Analyst sentiment remains largely positive, with a one-year median consensus price target of $28, suggesting a potential upside of 30%. On February 21, a Morgan Stanley analyst upgraded the stock from Equal Weight to Overweight, raising the price target from $25 to $27. The analyst expressed confidence in a hardware spending recovery in 2025 and viewed potential earnings surprises as a near-term catalyst, believing that current consensus estimates remain relatively conservative. The company is expected to report its Q4 2024 earnings on March 4.
6. Pony AI Inc. (NASDAQ:PONY)
YTD returns: 12%
Potential Upside: 24%
Number of Hedge Fund Holders: 20
Pony AI Inc. (NASDAQ:PONY) is an autonomous driving technology company focused on developing self-driving solutions for both passenger and commercial transportation. Its AI-driven mobility offerings include robotaxi services and autonomous freight transport, aiming to revolutionize the future of mobility.
Competing with companies like Tesla Inc. (NASDAQ:TSLA) in China, Pony AI Inc. (NASDAQ:PONY) leverages its flexible Virtual Driver technology—an advanced self-driving system adaptable to various vehicle types. By integrating proprietary software, hardware, and services, the company delivers a scalable and reliable autonomous driving solution. Its long-term vision is to build a profitable business by enabling widespread adoption of self-driving vehicles across multiple transportation sectors.
On February 21, Pony AI Inc. (NASDAQ:PONY) announced the launch of paid robotaxi services across multiple locations and routes in China. The company emphasized that it is the first and only provider approved to operate robotaxi services on these high-demand routes.
Investors reacted positively to the news, driving the stock up 32% on the announcement day. However, the gains were largely erased over the following two trading sessions, leaving it with YTD returns of only 12%. Despite the volatility, the stock holds a consensus Buy rating, with a one-year median price target of $20, suggesting a potential upside of 25%.
5. Fiserv Inc. (NYSE:FI)
YTD returns: 15%
Potential Upside: 12%
Number of Hedge Fund Holders: 80
Fiserv Inc. (NYSE:FI) provides payment processing, digital banking, and fintech solutions for businesses, banks, and financial institutions. The company enables seamless financial transactions through credit card processing, point-of-sale systems, mobile banking, and fraud prevention technologies.
Fiserv Inc. (NYSE:FI) reported strong Q4 2024 results on February 5. Adjusted revenue for the quarter grew 7% year-over-year to $4.9 billion, with adjusted organic growth reported at 13%. Adjusted EPS also increased a robust 15% in the quarter. Guidance for 2025 was also solid with organic revenue growth expected at 10% to 12% and adjusted EPS growth of 15% to 17%. Supported by its strong financial profile and robust results, shares have gained around 15% YTD.
The results were seen as positive by analysts and there were widespread upward revisions in price targets. Barclays analyst Ramsey El-Assal maintained his Overweight rating on Fiserv Inc. (NYSE:FI) and raised his price target to $265 from $235. An analyst from TD Cowen raised his price target to $277 from $235 and reaffirmed a Buy rating. The analyst was bullish given his estimates that growth is going to accelerate in FY 2025 as the company ramps up new products and partnerships. He also believed that better valuation should be supported by a resilient financial profile and earnings growth consistency.
4. BigBear.ai Holdings Inc. (NYSE:BBAI)
YTD returns: 16%
Potential Upside: 45%
Number of Hedge Fund Holders: 13
BigBear.ai Holdings Inc. (NYSE:BBAI) specializes in edge AI-powered decision intelligence solutions, catering to national security, supply chain management, and digital identity applications.
The company’s share price doubled within a week starting February 4 after securing a contract from the Department of Defense (DoD) Chief Digital and Artificial Intelligence Office (CDAO). This contract aims to enhance BigBear.ai Holdings Inc. (NYSE:BBAI)’s Virtual Anticipation Network (VANE) prototype, designed to improve the assessment of news media originating from countries that may pose foreign threats. The contract win reinforced the company’s technological capabilities and strengthened its investment appeal.
Following this development, analysts at Cantor Fitzgerald raised their price target from $3.50 to $8, citing recent contract wins and strategic shifts that enhance the stock’s attractiveness.
Although the stock has since retraced much of its gains, bringing its year-to-date increase to 16% as of February 28, analysts remain optimistic about further upside. The consensus average price target currently stands at $7.50, suggesting a potential gain of 45%.
3. WNS (Holdings) Limited (NYSE:WNS)
YTD returns: 20%
Potential Upside: 14%
Number of Hedge Fund Holders: 19
WNS (Holdings) Limited (NYSE:WNS) is a global provider of digital-led Business Process Management (BPM) solutions, offering services such as data management, customer support, analytics, and business process optimization. The company operates from various locations worldwide, utilizing a mix of local, nearshore, and offshore teams. By transferring clients’ business processes to its global delivery centers, WNS (Holdings) Limited (NYSE:WNS) helps businesses achieve cost savings, operational flexibility, improved service quality, and valuable insights.
The company’s stock has gained 20% year-to-date, with a notable 23% surge on January 23 following the release of strong Q3 2025 earnings (for the fiscal year ending in March). Revenue growth during the quarter was driven by increasing demand for process automation and cost efficiency, supported by new client deals and the expansion of existing relationships. To accelerate revenue growth, WNS (Holdings) Limited (NYSE:WNS) is focusing on securing large-scale transformational deals.
In his update on January 24, BofA analyst Kunal Tayal noted that prior headwinds have now subsided and expects the company to return to normalized growth in fiscal 2026. He also highlighted the stock’s attractive valuation, as it currently trades at a 35% discount to its five-year average. As a result, he raised his price target from $57 to $68 while maintaining a Buy rating on the stock.
2. Innodata Inc. (NASDAQ:INOD)
YTD returns: 33%
Potential Upside: 41%
Number of Hedge Fund Holders: 15
Innodata Inc. (NASDAQ:INOD) is a data engineering solutions company that helps businesses convert unstructured data into actionable insights. It specializes in AI model training, data annotation, and digital transformation services, serving a diverse range of industries.
The company had an exceptional 2024, with its share price soaring 386%, driven by growing AI-related opportunities and strong quarterly results in November. In 2025, the stock has continued its upward trend, gaining approximately 33% year-to-date. On February 20, Innodata Inc. (NASDAQ:INOD) reported its Q4 2024 earnings, posting an impressive 127% year-over-year revenue growth, surpassing its own guidance. For 2025, management has projected a 40% increase in revenue, supported by the company’s strong positioning to capitalize on the rising demand for high-quality training data and AI-driven automation as AI adoption accelerates across industries.
Following the earnings report, BWS Financial analyst Hamed Khorsand reiterated his Buy rating and raised his price target from $45 to $74. He sees the company’s guidance as a sign of sustained momentum in revenue growth. Additionally, he anticipates that Innodata Inc. (NASDAQ:INOD) could potentially reach $300 million in revenue by 2026, which, in his view, would warrant a significantly higher valuation.
1. VNET Group Inc. (NASDAQ:VNET)
YTD returns: 147%
Potential Upside: 24%
Number of Hedge Fund Holders: 26
VNET Group Inc. (NASDAQ:VNET) is a prominent pure-play data center provider in China, focusing on multi-carrier and multi-cloud internet data center (IDC) services. Its portfolio includes hyperscale and retail colocation, cloud services, and business virtual private network (VPN) services, catering to a diverse range of enterprise and hyperscale clients.
In 2025, VNET Group Inc. (NASDAQ:VNET) has experienced an impressive 147% stock rally. This surge in share price is primarily driven by the company’s rapid expansion in AI-centric data center solutions, addressing the growing demand from hyperscalers and enterprises. As the exclusive operator of Microsoft Azure and Microsoft 365 in China (through 21Vianet) and a key provider for Alibaba, the company is strategically positioned to benefit from the increasing investments in AI infrastructure. The company is transitioning towards high-value AI computing services while enhancing efficiency. With 490 MW capacity reserved for expansion, VNET Group Inc. (NASDAQ:VNET) is well-poised to leverage the rising demand for AI and cloud services in China.
On February 14, a Citi analyst raised his price target for the shares from $4 to $16.1, reaffirming his Buy rating. He also added the stock to Citi’s Focus List, citing the company’s prime position to benefit from China’s AI demand. The consensus 1-year median price target currently stands at $14.52, suggesting a 24% potential upside.
While we acknowledge the potential of VNET to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than VNET but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap.
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