In this article, we will take a look at the 14 best consulting stocks to buy now.
After the market rebounded in 2021 post-pandemic, the US consulting industry now faces a complex and uncertain landscape. Rising inflation, increased costs, talent shortages, and supply chain disruptions amid a volatile geopolitical climate are challenging the sector. Despite these hurdles, 66% of clients plan to increase their use of consultants over the next year. However, clients are becoming more cautious, opting for smaller, tactical projects to address immediate issues rather than engaging in lengthy, expensive transformation initiatives. This approach allows them to assess the impact of their investments before committing further. According to the 2023 report by Source Global Research, consulting firms must now deliver results within tighter timeframes amid heightened competition for smaller, sequential project components. Clients are increasingly seeking innovative and data-driven solutions, reflecting a desire for new and novel approaches throughout the project lifecycle. This shift highlights the need for consulting firms to adapt and excel in an environment where macroeconomic challenges have dampened post-pandemic optimism.
In 2021, the US experienced significant growth as clients invested in growth initiatives, buoyed by optimism and capital following the pandemic. However, by the end of 2022, the mood shifted due to rising inflation, energy prices, and political tensions, which hindered business operations and growth opportunities. Clients remain cautious, anticipating a potential global recession. Nevertheless, some clients remain hopeful, with around a third believing that current macroeconomic factors could positively impact their organizations. With technology being a top priority for clients, it’s no surprise that technology firms are leading the market. Clients are investing heavily in technology, which translates into significant consulting spend. Over the past year, two of the top three consulting areas were technology-related: 77% of clients invested in technology strategy and 71% in technology implementation. Productivity improvement, which often involves technology, ranked second at 73%. Although the market is crowded, technology firms are benefiting the most. Clients prefer these firms for their specialized technology solutions, which they believe offer more reliable outcomes compared to other providers, even if it means higher costs.
Uncertainty in the global economy is causing significant disruption in the US consulting industry, with firms dealing with project cancellations and clients pushing for lower fees, reported Financial Times. The report by Source Global Research highlights a major reassessment of consultants by US clients due to economic concerns. Over 75% of professional services buyers have cancelled or scrapped projects, and two-thirds have paused most existing work. The report forecasts 11% revenue growth in 2023, consistent with 2022, but notes increasing pressure on consultants’ fees, with clients now expecting lower rates compared to before the pandemic. Clients are more focused on getting value for money, with only about 50% believing firms provide value above their fees. Areas such as cybersecurity, HR consulting, and M&A for private equity firms are experiencing slowdowns. While IT consulting remains strong, it is targeted at projects that deliver quick financial benefits. The decline in hiring, initially observed in the Big Four accounting and consulting firms, has extended to smaller players as well. According to a survey by investment bank William Blair, job postings by US specialty consultants were down 57% in June 2023 compared to the previous year and have fallen below pre-pandemic levels. At the Big Four, job postings have decreased by 80% year-on-year.
There is one long-term trend that we haven’t talked yet affecting consulting firms positively. The rise of generative AI, a powerful new technology that can create realistic text and images, has sparked a gold rush for consulting firms. Companies like Reckitt Benckiser, unsure of how to leverage this technology, are turning to consultants for guidance. This has led to a surge in revenue for these firms, with some like McKinsey seeing 40% of their business coming from AI-related work. Consulting firms are among the early winners of the AI revolution which is why we believe this may be a good time to invest in consulting stocks. However, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than consulting companies but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
A business manager consulting with a financial advisor in an office setting.
Our Methodology
We leveraged Insider Monkey’s comprehensive database of 920 prominent hedge funds to identify the top 14 consulting stocks with the highest level of hedge fund investment as of Q1 2024. These stocks are listed in order of increasing hedge fund ownership, providing insight into the most popular consulting stocks among elite investors.
14. Information Services Group, Inc. (NASDAQ:III)
Number of Hedge Fund Holders: 7
Information Services Group, Inc. (NASDAQ:III) operates as a technology research and advisory company in the Americas, Europe, and Asia Pacific, offering digital transformation services such as automation, cloud, and data analytics, as well as sourcing advisory, managed governance and risk, network carrier, and technology strategy and operations. In the latest quarter announced on May 9, the company reported an EPS of $0.01, missing by $0.05. Revenue was $64.27 million, missing expectations by $1.80 million. On May 13, Barrington trimmed the price target for Information Services Group, Inc. (NASDAQ:III) from $5 to $3.50 but maintained an “Outperform” rating. The stock’s year-to-date price return is -25.27%, compared to the S&P 500’s 13.84% gain.
During Q1, 2024 the count of hedge funds holding positions in Information Services Group, Inc. (NASDAQ:III) fell to 7 from 10 in the prior quarter, as reported by Insider Monkey’s database encompassing 920 hedge funds. These holdings collectively amount to around $0.02 billion. Gregg J. Powers’s Private Capital Management emerged as the leading shareholder among these hedge funds during this timeframe.
13. ASGN Incorporated (NYSE:ASGN)
Number of Hedge Fund Holders: 10
ASGN Incorporated (NYSE:ASGN) provides IT services and solutions in technology, digital, and creative fields for both commercial and government sectors in the US, Canada, and Europe, operating through two segments: Commercial and Federal Government. In the latest quarter, announced on July 24, ASGN Incorporated (NYSE:ASGN) reported an EPS of $1.36, beating expectations by $0.03. However, revenue was $1.03 billion, missing forecasts by $12.14 million. The company’s focus on high-end IT consulting, particularly in AI, is paying off with several contract wins. Net income was $47.2 million, bolstered by improved gross margins and share repurchases totaling $108 million, with $667 million remaining for future buybacks. Free cash flow was strong at $85.4 million, with $132.2 million in cash on hand. Canaccord Genuity Group reissued a “buy” rating with a $115.00 price target for ASGN Incorporated (NYSE:ASGN) on July 25.
In the first quarter of 2024, there were 10 hedge funds holding positions in ASGN Incorporated (NYSE:ASGN), as compared to 15 in the previous quarter according to Insider Monkey’s database. The total value of these holdings is approximately $0.08 billion. Cliff Asness’s AQR Capital Management held the largest stake among these hedge funds during this period.
Baron Small Cap Fund made the following comment about ASGN Incorporated (NYSE:ASGN) in its Q4 2022 investor letter:
“ASGN Incorporated (NYSE:ASGN) is large staffing company providing IT workers and professional services to Fortune 500 companies. Shares fell this quarter over concerns about demand for future hirings in a slowing economy. The company had a strong third quarter, growing revenues 11.6% and EBITDA 9%. Its consulting segment, a relatively new venture, grew revenues 43% in the quarter and now is about a quarter of overall revenues. The government services segment was flat, but we expect growth going forward as bookings have been strong. The company announced a nice acquisition of a consulting business that will enhance its cyber capabilities. Its customers’ technology initiatives are mission critical, so we expect business to be resilient even if the economy slows. We believe the stock is really cheap for this high-quality, fast-growing business, trading at under 12 times our estimate for 2023 earnings.”
12. Forrester Research, Inc. (NASDAQ:FORR)
Number of Hedge Fund Holders: 16
Forrester Research, Inc. (NASDAQ:FORR) is an independent research and advisory company headquartered in Cambridge, Massachusetts. It operates in three segments: Research, Consulting, and Events. The company provides business and technology leaders with research services, consulting projects, and hosts events to foster growth through customer obsession. In a recent development, on July 22, Forrester Research, Inc. (NASDAQ:FORR) added Bob Bennett to its board, expanding it to nine members. Bennett, an experienced tech entrepreneur, joins following Cory Munchbach’s recent appointment and ahead of Gretchen Teichgraeber’s retirement in May. Despite economic challenges, Forrester Research, Inc. (NASDAQ:FORR) is confident in its strategy, forecasting revenue between $430 million and $450 million for 2024 and continuing investment in generative AI with the launch of its tool, Izola.
The number of hedge funds in Insider Monkey’s database owning stakes in Forrester Research, Inc. (NASDAQ:FORR) grew to 16 in Q1 2024, from 12 in the preceding quarter. The consolidated value of these stakes is nearly $0.09 billion. Among these hedge funds, Chuck Royce’s Royce & Associates was the company’s leading stakeholder in Q1.
Meridian Small Cap Growth Fund stated the following regarding Forrester Research, Inc. (NASDAQ:FORR) in its first quarter 2024 investor letter:
“Forrester Research, Inc. (NASDAQ:FORR) is an independent market research and consulting firm widely known for its publications and insights on topics such as cloud migration, AI, cybersecurity, and customer experience. We like the business for its potential to generate high margins through a sticky, subscription-based revenue model. The company acquired SiriusDecisions in 2019, expanding its expertise beyond its customer base. Over the last few years, however, the company implemented several changes that negatively impacted results. First, they migrated the product away from their legacy strengths and pushed customers to switch to a combined offering. These changes had the unintended consequence of forcing customers to reconsider their overall research spend and, in some cases, consolidate and reduce spending, causing a negative impact on revenue. Second, the company underwent a salesforce transition to target decision-makers higher up in the organization with its expanded offering. The stock declined during the quarter as new sales and revenue weakened through the transition. We believe that the market has been short[1]sighted and overly punitive. The company currently trades at an attractive valuation and, with an upgraded salesforce aligned with broadened capabilities, is well-positioned to improve results into 2025. We maintained our position in the company during the quarter.”
11. The Hackett Group, Inc. (NASDAQ:HCKT)
Number of Hedge Fund Holders: 17
The Hackett Group, Inc. (NASDAQ:HCKT), headquartered in Miami, Florida, offers executive advisory, strategic consulting, and digital transformation services globally. It operates through three segments: Global Strategy & Business Transformation, Oracle Solutions, and SAP Solutions. The company provides best practice research, benchmarking services, and business transformation practices, along with Oracle and SAP solutions for application deployment and support. On May 8, Barrington reduced its price target for The Hackett Group, Inc. (NASDAQ:HCKT) from $28 to $26, but maintained an Outperform rating. The analyst cited concerns that longer sales cycles will negatively impact the company’s revenue outlook in the second half of 2024, particularly in its Global Strategy and Business Transformation segment. As a result, Barrington lowered its estimates for 2024 and 2025.
In the first quarter of 2024, there were 17 hedge funds holding positions in The Hackett Group, Inc. (NASDAQ:HCKT), as compared to 14 in the previous quarter according to Insider Monkey’s database. The total value of these holdings is approximately $0.13 billion. Douglas T. Granat’s Trigran Investments held the largest stake among these hedge funds during this period.
Ariel Small-Cap Value Strategy made the following comment about The Hackett Group, Inc. (NASDAQ:HCKT) in its Q4 2022 investor letter:
“We purchased The Hackett Group, Inc. (NASDAQ:HCKT), a niche IT consulting firm that provides benchmarking studies, IT advisory and software implementation services to help clients optimize business processes and resource efficiency. Over the last 30 years, HCKT has accumulated nearly 20,000 studies with major organizations, including 93% of the Dow Jones Industrials and 91% of the Fortune 100. We believe this deep repository of best practices data serves as a point of differentiation, resulting in expertise and cross-selling advantages relative to a fragmented and homogeneous peer set. Several years of declining on premise software demand, compounded by the disruption of the pandemic, created an opportunity to own an underappreciated beneficiary of both a secular shift toward digital transformation, as well as increasing demand for subscription benchmarking data services.”
10. Exponent, Inc. (NASDAQ:EXPO)
Number of Hedge Fund Holders: 21
Exponent, Inc. (NASDAQ:EXPO), headquartered in Menlo Park, California, is a science and engineering consulting firm serving various industries worldwide. It operates through two segments: Engineering and Other Scientific, and Environmental and Health, offering services in areas like biomechanics, civil engineering, data sciences, and health sciences. Founded in 1967, Exponent, Inc. (NASDAQ:EXPO) provides solutions across approximately 90 technical disciplines. On April 29, Truist increased its price target for Exponent, Inc. (NASDAQ:EXPO) from $95 to $100 and maintained a Buy rating. The analyst was impressed with Exponent’s Q1 results, which showcased the company’s potential and the strengths of its reactive business. As a result, Truist is also raising its 2024 earnings per share (EPS) estimate for Exponent by 18 cents to $1.93.
In a latest development, Exponent, Inc. (NASDAQ:EXPO) has extended its commercial land lease with the State of Arizona for 15 years starting January 17, 2028, with increased annual payments. The extension, finalized on June 19, 2024, will see current payments of $1,009,000 rise to approximately $6,183,000 annually after January 16, 2028. The lease also includes rent adjustments in 2033 and 2038 based on the consumer price index. This extension underscores Exponent, Inc. (NASDAQ:EXPO) commitment to its Arizona facilities and reflects confidence in its long-term growth strategy.
The number of hedge funds in Insider Monkey’s database owning stakes in Exponent, Inc. (NASDAQ:EXPO) grew to 21 in Q1 2024, as compared to 19 in the preceding quarter. The consolidated value of these stakes is nearly $0.17 billion. Among these hedge funds, Terry Smith’s Fundsmith LLP was the company’s leading stakeholder in Q1.
TimesSquare Capital U.S. Small Cap Growth Strategy stated the following regarding Exponent, Inc. (NASDAQ:EXPO) in its first quarter 2024 investor letter:
“Many of our Industrial positions provide necessary business-to-business operational services, highly technical components, automation & efficiency improvements, or essential infrastructure services. Exponent, Inc. (NASDAQ:EXPO) is an engineering and scientific consulting company. The company fell short of estimates for the fourth quarter, causing a -7% selloff in its shares and we reduced this holding.”
09. FTI Consulting, Inc. (NYSE:FCN)
Number of Hedge Fund Holders: 25
FTI Consulting, Inc. (NYSE:FCN), based in Washington, D.C., provides business advisory services globally. It operates through five segments: Corporate Finance & Restructuring, Forensic and Litigation Consulting, Economic Consulting, Technology, and Strategic Communications. The company serves various sectors, including aerospace, finance, healthcare, and technology, offering services in business transformation, disputes, economic consulting, e-discovery, and corporate communications. On June 25, FTI Consulting, Inc. (NYSE:FCN) launched a comprehensive digital offering that combines the firm’s industry expertise across various segments. This integrated approach leverages digital tools and technologies like machine learning, AI, and advanced data analytics to deliver tailored solutions for clients. By bridging individual segment expertise, FTI Consulting, Inc. (NYSE:FCN) aims to help clients address evolving risks and opportunities across emerging and established technologies.
In the first quarter of 2024, the number of hedge funds with stakes in FTI Consulting, Inc. (NYSE:FCN) increased to 25 from 18 in the previous quarter, according to Insider Monkey’s database. The combined value of these stakes is approximately $0.25 billion. Bruce Emery’s Greenvale Capital emerged as the largest stakeholder among these hedge funds during this period.
Upslope Capital Management made the following comment about FTI Consulting, Inc. (NYSE:FCN) in its second quarter 2023 investor letter:
“FTI Consulting, Inc. (NYSE:FCN) is a boutique consulting firm with expertise in restructuring, dispute, and other areas. Upslope first invested in FTI as a contrarian idea in Feb 2021 (“what’s more out of favor during a speculative bubble than a restructuring consultant?”). The stock is one of Upslope’s biggest contributors since inception, and until recently one of the portfolio’s largest longs. After disappointing 1Q results, however, I exited the position and ultimately initiated a modest short. Rationale for the abrupt change: (1) contrarian thesis has played out and no longer holds (opposite is true), (2) long-time CEO has suddenly started selling big chunks of stock for the first time ever (that I can tell), (3) shares recently hovered ~27x EPS – expensive and right where they peaked during the 2008-9 financial crisis. While the restructuring cycle may have more to go, I think FTI shares will see serious multiple compression, and (4) increasingly choppy performance: over the last four quarterly earnings reports, shares have moved -8%, +11%, -19%, -9%. This is not entirely management’s fault but it’s notable.”
08. Huron Consulting Group Inc. (NASDAQ:HURN)
Number of Hedge Fund Holders: 25
Huron Consulting Group Inc. (NASDAQ:HURN), located in Chicago, Illinois, provides consultancy services globally. It operates through three segments: Healthcare, Education, and Commercial. The company offers performance improvement, digital solutions, financial advisory, and organizational transformation services to health systems, educational institutions, and various industries, including finance, energy, and manufacturing. On May 24, Wedbush initiated coverage of Huron Consulting Group Inc. (NASDAQ:HURN) with an Outperform rating and a $110 price target. The analyst is bullish on Huron’s prospects due to its significant exposure to the healthcare and education sectors, which are undergoing significant transformations. The analyst believes Huron Consulting Group Inc. (NASDAQ:HURN) is well-positioned to benefit from the growing need for cost cutting and process improvements in these sectors. Additionally, Huron Consulting Group Inc. (NASDAQ:HURN) financial advisory expertise in helping distressed enterprise clients is seen as a key strength amid ongoing macroeconomic uncertainty. Wedbush expects Huron Consulting Group Inc. (NASDAQ:HURN) to achieve 9-10% sales growth in both 2024 and 2025.
During Q1, 2024 the count of hedge funds holding positions in Huron Consulting Group Inc. (NASDAQ:HURN) grew to 25 from 24 in the prior quarter, as reported by Insider Monkey’s database encompassing 920 hedge funds. These holdings collectively amount to around $0.10 billion. Israel Englander’s Millennium Management emerged as the leading shareholder among these hedge funds during this timeframe.
Aristotle Capital Small Cap Equity Strategy made the following comment about Huron Consulting Group Inc. (NASDAQ:HURN) in its Q3 2023 investor letter:
“Huron Consulting Group Inc. (NASDAQ:HURN), a specialty consulting company that provides financial, operational, and digital consulting services to health care, education and commercial clients, appreciated after delivering strong results highlighted by continued momentum within the company’s health care and education segments. We maintain our investment, as we believe the company remains well-positioned to capitalize on a demand backdrop aided by financial and operational pressures in its largest end-markets, along with secular tailwinds supporting digital transformation, analytics and cloud consulting.”
07. Cognizant Technology Solutions Corporation (NASDAQ:CTSH)
Number of Hedge Fund Holders: 35
Cognizant Technology Solutions Corporation (NASDAQ:CTSH) provides consulting, technology, and outsourcing services globally through four segments: Financial Services, Health Sciences, Products and Resources, and Communications, Media, and Technology. On July 23, Barclays raised its price target for Cognizant Technology Solutions Corporation (NASDAQ:CTSH) from $75.00 to $80.00 with an “equal weight” rating. In the latest quarter, Cognizant Technology Solutions Corporation (NASDAQ:CTSH) reported an EPS of $1.12, beating expectations by $0.01, with revenue of $4.76 billion, surpassing forecasts by $39.33 million. On July 29, Cognizant (NASDAQ: CTSH) announced a strategic partnership with Hays, a leading workforce solutions and recruitment specialist. This partnership aims to transform Hays’ technology landscape, enhancing operational efficiency and innovation. Cognizant Technology Solutions Corporation (NASDAQ:CTSH) will support Hays’ global Applications, Infrastructure, and Transformation initiatives, providing modern, secure technologies for improved customer experience and valuable data insights to drive future growth.
In the first quarter of 2024, the number of hedge funds with stakes in Cognizant Technology Solutions Corporation (NASDAQ:CTSH) stood same at 35 as in the previous quarter, according to Insider Monkey’s database. The combined value of these stakes is approximately $2.05 billion. Richard S. Pzena’s Pzena Investment Management emerged as the largest stakeholder among these hedge funds during this period.
06. Booz Allen Hamilton Holding Corporation (NYSE:BAH)
Number of Hedge Fund Holders: 41
Booz Allen Hamilton Holding Corporation (NYSE:BAH) provides management and technology consulting services to governments, corporations, and non-profits in the US and internationally. The company specializes in artificial intelligence, data science, and digital solutions, including machine learning, predictive modeling, and cyber services. With a focus on technology and engineering, Booz Allen Hamilton offers a range of services, from software engineering and systems integration to user experience design and digital product development, helping clients transform their businesses and achieve their goals.
On July 11, Booz Allen Hamilton Holding Corporation (NYSE:BAH) announced that its corporate venture capital arm, Booz Allen Ventures, LLC, has made a strategic investment in Quindar, a commercial space technology company, to automate and democratize satellite operations. The investment aligns with Booz Allen’s strategy to accelerate innovation for federal clients, particularly in the space domain. Quindar’s platform uses AI to analyze, test, and operate satellite constellations with minimal human intervention, aiming to “democratize space” and make space missions more efficient, secure, and accessible.
On July 1, Booz Allen Hamilton Holding Corporation (NYSE:BAH) announced a 7-year, $419 million contract with the National Science Foundation (NSF) to modernize and operate their merit review and grants management system. The company will use agile development, DevSecOps, and cloud technology to speed up and scale NSF’s mission-critical systems. Booz Allen Hamilton Holding Corporation (NYSE:BAH) will also leverage AI to positively impact citizens and foster scientific advancement. This contract builds on the company’s 20-year history of supporting NSF and demonstrates its expertise in managing complex technical mission stacks. The project will support over 20 NSF mission-critical applications and help the agency stay at the forefront of scientific discovery and technological advancements.
In the first quarter of 2024, the number of hedge funds with stakes in Booz Allen Hamilton Holding Corporation (NYSE:BAH) increased to 41 from 30 in the previous quarter, according to Insider Monkey’s database. The combined value of these stakes is approximately $0.27 billion. Israel Englander’s Millennium Management emerged as the largest stakeholder among these hedge funds during this period.
LVS Advisory stated the following regarding Booz Allen Hamilton Holding Corporation (NYSE:BAH) in its first quarter 2024 investor letter:
“We added Booz Allen Hamilton Holding Corporation (NYSE:BAH) to the growth portfolio in October 2023. I am highlighting Booz Allen this quarter because the exercise of comparing BAH to CACI serves as an interesting example of weighing the trade-offs between “quality” and “value” when picking stocks.
Booz Allen is a technology consulting firm specializing in government contracting. Founded in 1914, Booz Allen has a storied history partnering with the US Government which includes helping the US Navy prepare for World War II. These deep roots have helped engrain the Company into the fabric of Washington DC and provide a foundation for the business’ deep moat.
Not resting on its laurels, Booz Allen has relentlessly re-invested in its business by acquiring and retaining the top talent and technology in the government contracting space. This has translated into Booz Allen serving as one of the most awarded government contractors. The Company is the #1 provider of artificial intelligence to the US Federal Government with nearly 200 government AI contracts spanning defense, national security, and civil missions. Frost & Sullivan ranks Booz Allen as the most innovative company in the Global Managed Detection and Response Market. The Company is also ranked highly in broader surveys including Fortune’s ‘World’s Most Admired Companies’ and Glassdoor’s ‘Best 100 Places to Work’…” (Click here to read the full text)
05. Gartner, Inc. (NYSE:IT)
Number of Hedge Fund Holders: 44
Gartner, Inc. (NYSE:IT) is a global research and advisory company operating in the US, Canada, Europe, the Middle East, Africa, and internationally through its Research, Conferences, and Consulting segments. The Consulting segment provides market-leading research, custom analysis, and support services, focusing on IT cost optimization, digital transformation, and IT sourcing optimization.
Gartner, Inc. (NYSE:IT) exceeded analyst expectations in Q2, reporting an adjusted EPS of $3.22, beating the consensus of $3.03. Revenue also surpassed forecasts, reaching $1.6 billion compared to the expected $1.59 billion. Despite a decline in operating cash flow and free cash flow by 15.1% and 17.0% respectively, the Board of Directors increased the share repurchase authorization by $600 million in July 2024, showing confidence in the company’s financial stability. On July 11, Morgan Stanley analyst Toni Kaplan maintained a hold rating on Gartner, Inc. (NYSE:IT) and raised the target price from $400 to $470.
In Q1 2024, the count of hedge funds holding stakes in Gartner, Inc. (NYSE:IT) rose to 44 from 41 in the previous quarter, based on Insider Monkey’s database of 920 hedge funds. These stakes collectively amount to around $2.76 billion in value. David Blood And Al Gore’s Generation Investment Management emerged as the largest stakeholder among these hedge funds during this period.
Baron Asset Fund stated the following regarding Gartner, Inc. (NYSE:IT) in its first quarter 2024 investor letter:
“Shares of Gartner, Inc. (NYSE:IT), the leading provider of syndicated research to the IT sector, contributed to performance. Fourth quarter financial results were mixed, with declines in net income and EPS. However, solid increases in contract value and strong full-year performance, including a 9% increase in net income and an 11% rise in diluted EPS, helped boost the company’s share price. In addition, a 19% increase in free cash flow for the quarter and 6% for the full year underscored Gartner’s operational efficiency. Gartner’s core subscription research businesses compounded at attractive rates, and we believe growth is poised to accelerate. We think Gartner will emerge as a key decision support resource for every company evaluating the opportunities and risks of AI on its business, providing a tailwind to volume growth and pricing realization. We expect Gartner’s sustained revenue growth and focus on cost control to drive continued margin expansion and enhanced free-cash-flow generation. The company’s balance sheet is in excellent shape and can support aggressive repurchases and bolt-on acquisitions, in our view.”
04. Palantir Technologies Inc. (NYSE:PLTR)
Number of Hedge Fund Holders: 45
Palantir Technologies Inc. (NYSE:PLTR) develops software platforms for the intelligence community, aiding in counterterrorism efforts in the US, UK, and internationally. Citi analysts are optimistic about Palantir Technologies Inc. (NYSE:PLTR) ahead of its upcoming earnings report, predicting a slight beat of expectations. Despite a cautious outlook for the software sector, Citi highlights Palantir as a standout performer. They noted that while Q2 might be choppy, they see solid commercial momentum despite some government uncertainty. Citi analysts expect Palantir Technologies Inc. (NYSE:PLTR) to slightly exceed topline metrics in Q2, with potential profitability upside. Following a visit to Palantir’s headquarters, they are increasingly positive about the company’s commercial and AI platform (AIP) momentum. Though monetization and revenue traction are early, the company appears promising. Government contracts remain depressed, but management is confident about long-term acceleration, though cautious near-term. Recent government data showed a steep decline, over 60%, due to a Department of Defense contract that included catch-up payments last Q2. Citi has slightly raised its long-term growth rates for Palantir Technologies Inc. (NYSE:PLTR) commercial and government sectors, setting a target price of $28 per share. In the latest quarter, announced on May 6, Palantir Technologies reported an EPS of $0.08, which was in line with expectations. Additionally, Palantir Technologies Inc. (NYSE:PLTR) revenue was $634.34 million, exceeding expectations by $16.73 million.
In the first quarter of 2024, the number of hedge funds with positions in Palantir Technologies Inc. (NYSE:PLTR) rose to 45 from 44, according to Insider Monkey’s database, which tracks 920 hedge funds. The combined value of these holdings is approximately $2.62 billion. During this period, Ken Griffin’s Citadel Investment Group became the largest shareholder among these hedge funds.
Carillon Scout Mid Cap Fund stated the following regarding Palantir Technologies Inc. (NYSE:PLTR) in its first quarter 2024 investor letter:
“The top contributor to return for the quarter was Palantir Technologies Inc. (NYSE:PLTR). Sentiment improved on Palantir after it reported stronger than expected commercial customer revenue and free cash flow. U.S. commercial growth was especially encouraging, as U.S. commercial revenue was up by a large percentage year over year for the fourth quarter and U.S. commercial customer count grew nearly as much. We expect Palantir to become one of the premier artificial intelligence (AI) software providers, built on its Foundry and AIP platforms.”
03. Verisk Analytics, Inc. (NASDAQ:VRSK)
Number of Hedge Fund Holders: 47
Verisk Analytics, Inc. (NASDAQ:VRSK) provides data analytics and technology solutions to the insurance industry in the US and internationally. The company offers a range of solutions, including underwriting, rating, and claims solutions for property, auto, and life insurance, as well as catastrophe modeling and marketing solutions. Verisk Analytics, Inc. (NASDAQ:VRSK) solutions help insurers to assess and manage risk, detect fraud, and optimize workflows, and also provides software to the specialty insurance market, with a focus on data analytics and technology to transform insurance processes. On July 9, UBS analyst Alex Kramm maintained a Neutral rating on Verisk Analytics, Inc. (NASDAQ:VRSK) and raised the price target to $285 from $255.
On July 25, Verisk Analytics, Inc. (NASDAQ:VRSK) launched a new data solution assessing risks to assets of over 50,000 publicly traded companies. The Asset Risk Exposure Analytics (AREA) combines 4 million+ asset locations with detailed geospatial risk data, mapping 85 risk issues at subnational levels. This tool offers investors comprehensive insights into corporate exposure to climate, environmental, human rights, and political risks, highlighting vulnerabilities and strengths in global operations.
During Q1, 2024 the count of hedge funds holding positions in Verisk Analytics, Inc. (NASDAQ:VRSK) rose to 47 from 32 in the prior quarter, as reported by Insider Monkey’s database encompassing 920 hedge funds. These holdings collectively amount to around $1.19 billion. Guardian Capital’s GuardCap Asset Management emerged as the leading shareholder among these hedge funds during this timeframe.
TimesSquare Capital U.S. Focus Growth Strategy stated the following regarding Verisk Analytics, Inc. (NASDAQ:VRSK) in its first quarter 2024 investor letter:
“There was some price weakness for Verisk Analytics, Inc. (NASDAQ:VRSK), which provides risk information and analysis for the property/casualty insurance industry. Its revenues and earnings were in line with expectations, though its guidance was more conservative. More notable from our perspective, pricing for auto insurance was strong, which bodes well for Verisk’s near-term growth prospects, so as its shares pulled back by -1% this quarter we added to our holdings.”
02. International Business Machines Corporation (NYSE:IBM)
Number of Hedge Fund Holders: 49
International Business Machines Corporation (NYSE:IBM) offers integrated solutions and services globally through its Software, Consulting, Infrastructure, and Financing segments. The Software segment provides hybrid cloud and AI platforms for digital and AI transformations. The Consulting segment focuses on strategy, experience, technology, and operations integration by industry. RBC Capital recently raised International Business Machines Corporation (NYSE:IBM) stock price target to $211 from $200, maintaining an Outperform rating. This follows IBM’s strong performance, including a significant increase in its Generation AI (GenAI) business, which doubled to $2 billion. RBC Capital highlighted IBM’s robust free cash flow (FCF), exceeding expectations and supporting forward guidance through fiscal year 2025. Despite a temporary slowdown in its Red Hat segment, International Business Machines Corporation (NYSE:IBM) management is optimistic about growth in the second half of the year. The improved revenue forecast and FCF outlook for fiscal year 2024 indicate stable performance. The doubling of International Business Machines Corporation (NYSE:IBM) GenAI business to $2 billion underscores its innovation and market position in AI. RBC Capital’s positive outlook on IBM’s trajectory and the increased price target suggest favorable stock value prospects.
In the first quarter of 2024, the number of hedge funds with stakes in International Business Machines Corporation (NYSE:IBM) decreased to 49 from 50 in the previous quarter, according to Insider Monkey’s database of 920 hedge funds. The combined value of these stakes is approximately $1.007 billion. Ken Griffin’s Citadel Investment Group emerged as the largest stakeholder among these hedge funds during this period.
01. Accenture plc (NYSE:ACN)
Number of Hedge Fund Holders: 57
Accenture plc (NYSE:ACN) is a professional services company offering a wide range of services globally, including strategy and consulting, technology and operations, and industry-specific solutions. The company provides various services such as application management, intelligent automation, data analytics, digital commerce, infrastructure management, and cloud services, as well as business process outsourcing and technology innovation. Accenture plc (NYSE:ACN) also offers specialized services like engineering and R&D digitization, supply chain management, and sustainability services, and has collaborations with companies like Salesforce to develop industry-specific cloud solutions.
On July 22 the breaking news emerged that Accenture plc (NYSE:ACN) has agreed to acquire Camelot Management Consultants, a German consulting firm specializing in SAP, supply chain, data, and analytics. This acquisition aims to strengthen Accenture plc (NYSE:ACN) capabilities in building intelligent and resilient supply chains, leveraging SAP and AI. Camelot’s expertise in supply chain management, analytics, and data strategy will enhance Accenture plc (NYSE:ACN) offerings, helping clients adopt AI-driven solutions. With over 700 professionals and a strong presence in Germany, Austria, Switzerland, and other countries, Camelot will bring significant value to Accenture plc (NYSE:ACN) global client base. The acquisition will further solidify Accenture’s position as a leading provider of SAP and AI-driven supply chain solutions, enabling clients to build more efficient and responsive supply chains.
In the first quarter of 2024, the number of hedge funds with positions in Accenture plc (NYSE:ACN) fell to 57 from 58, according to Insider Monkey’s database, which tracks 920 hedge funds. The combined value of these holdings is approximately $2.40 billion. During this period, Guardian Capital’s GuardCap Asset Management became the largest shareholder among these hedge funds.
Polen Focus Growth Strategy stated the following regarding Accenture plc (NYSE:ACN) in its Q2 2024 investor letter:
“Autodesk and Accenture plc (NYSE:ACN) were also notable absolute detractors in the quarter. For Accenture, the past year has proven to be a weak backdrop for the IT services industry as enterprises rationalize their IT budgets and defer spending on discretionary, shorter-cycle deals. Accenture has not been immune to this broader weakness, as evidenced by slowing growth in recent quarters. However, we would note that later in the quarter, the stock responded very positively to results that showcased AI bookings growing rapidly, though still a small portion of overall bookings. Additionally, as we head into 2025, growth comparisons should ease considerably.”
ACN tops our list of best consulting stocks. However, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than ACN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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