8 Best Information Technology Services Stocks to Invest in Now

2) Accenture plc (NYSE:ACN)

Number of Hedge Fund Holders: 68

Accenture plc (NYSE:ACN) is engaged in providing management and technology consulting services and solutions.

Over the long term, Accenture plc (NYSE:ACN) should benefit from sticky clientele. The high switching costs reflect that its clients, mainly those with larger contracts, will not switch providers. This provides healthy revenue visibility. Moreover, it has focused on inorganic growth opportunities and has a history of growth via acquisitions. Recently, it purchased Excelmax Technologies in India, which should fuel its silicon design and engineering capabilities.

Wall Street believes that Accenture plc (NYSE:ACN) is well-placed to benefit from the current AI wave. It can help in the development and implementation of LLMs for generative AI and the identification of business data.  This rapid monetization of AI opportunities reflects its ability to capitalize on emerging trends.

Accenture plc (NYSE:ACN)’s growth strategy relies on strategic acquisitions to enhance its capabilities and expand its market reach. It announced the acquisitions of Axis Corporate, which is a management and technology consulting firm specializing in financial services. It acquired CLIMB, an IT services provider based out of Japan. Wall Street expects that GenAI might add significant net annual growth to Accenture plc (NYSE:ACN)’s revenue. Its strong relationships with renowned technology partners and record of integrating new technologies in its service offerings place it favorably to leverage the GenAI revolution.

ClearBridge Investments, an investment management company, released its Q3 2024 investor letter. Here is what the fund said:

“One of the keys to recent results and to delivering consistent, long-term performance through market cycles is how we think about risk. During our investment diligence process and ongoing work on portfolio holdings, we focus attention on how our thesis could be wrong and what the implications for stock valuation would be under these scenarios. Being sensitive to valuation is at the core of our portfolio construction efforts and prevents us from owning a particular stock or theme where we are not comfortable with the price. Accenture plc (NYSE:ACN), a new addition in the second quarter, is a good example. The stock was on our whiteboard for several years, and we remained patient until volatility created an attractive entry point. We further added to the position in the third quarter.”