We recently compiled a list of the 8 Best Information Technology Services Stocks to Invest in Now. In this article, we are going to take a look at where Accenture plc (NYSE:ACN) stands against other best information technology services stocks.

As per AXA Investment Managers, the US appears to be well-placed to continue to dominate the technology space. The frenzy related to generative artificial intelligence topped in June and tech stocks have underperformed the overall market since then. From the end of June to the end of October, the NASDAQ-100 Technology Sector saw a fall of over ~2% while the broader market (S&P 500) went up by over ~5%. AXA Investment Managers highlighted that the guidance from tech companies concerning new products and services demonstrates that earnings growth is expected to remain healthy moving forward.

Even though AI technologies are more prevalent in the consumer products category, many experts believe that we are in the early stages of this tech revolution.

Generative AI and Hyperautomation – Well-placed for a Next Revolution

Over the past few years, tech industry veterans have been amazed by the potential of generative AI. Moving forward, in 2025, Forbes believes that market players will begin seeing organizations move beyond this hype. This means that companies are expected to integrate generative AI into their business strategy. In the earlier wave of the AI revolution, experts saw leading tech companies rethink and transform their existing business models like online advertising, retail, and media streaming.

Forbes highlighted that 2025 can be a year of change. This is because more strategic use cases – such as realigning business models concerning the potential of generative AI – are expected to come forward. Therefore, there can be generative tools and applications enabling entirely new possibilities throughout different industries such as healthcare, manufacturing, education, and several other industries.

As per ConnectWise, one of the most important emerging technological trends is hyperautomation. It revolves around the end-to-end unification of automated functions powering efficiency at scale. Several organizations have been leveraging AI, ML, and robotic process automation (RPA) in a bid to automate independent business functions in a highly integrated way.

While several technologies leveraged AI in automation, the strong dynamics of hyperautomation should not be overlooked. One of the biggest trends is increased productivity and accessibility of the technology. The secondary impacts of this expansion should be seen across every industry as full-scale digital transformation becomes feasible. Talking about the industry-specific applications, in manufacturing, hyperautomation should help in enhancing production efficiency in factories and in healthcare, this technology will help in automating sensitive data processing and gain insights into patient care.

READ ALSO: 7 Best Stocks to Buy For Long-Term and 8 Cheap Jim Cramer Stocks to Invest In.

Intelligent Enterprise- An Idea or a Reality

A trend that is likely to revolutionize the broader technology industry is the idea of intelligent enterprise. As per SAP, this concept revolves around using data assets in a bid to achieve the desired outcomes faster with lesser risk and anticipating and proactively responding to customer needs. As per Future Market Insights, the intelligent enterprise data capture software market could see a CAGR of ~12.70%. By 2034, this market could soar to a strong valuation of US$37,189.90 million. The increased adoption of automation technologies across businesses should result in increased demand for intelligent enterprise data capture software.

With the help of automating data extraction and processing tasks, the technology supports businesses seeking to streamline workflows.

Our Methodology

To list the 8 Best Information Technology Services Stocks to Invest in Now, we used the Finviz screener to extract the relevant stocks. Finally, the stocks having the highest hedge fund holdings were considered. The list has been arranged in the ascending order of their hedge fund sentiment, as of Q2 2024.

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 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).

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.”

Overall ACN ranks 2nd on our list of 8 Best Information Technology Services Stocks to Invest in Now. While we acknowledge the potential of ACN as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for a deeply undervalued 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.

READ NEXT: $30 Trillion Opportunity: 15 Best Humanoid Robot Stocks to Buy According to Morgan Stanley and Jim Cramer Says NVIDIA ‘Has Become A Wasteland’.

Disclosure: None. This article is originally published at Insider Monkey.