9. EPAM Systems, Inc. (NYSE:EPAM)
Number of Hedge Fund Holders In Q2 2024: 37
EPAM Systems, Inc. (NYSE:EPAM) is a business services company that provides software and engineering products. The firm provides engineering and software development services to a variety of industries such as financial services, healthcare, and media. Its shares are down 32% year to date as demand for information technology services is slow in an economy constrained by high interest rates. EPAM Systems, Inc. (NYSE:EPAM)’s stock tumbled by 27% in May after the firm’s first quarter earnings results saw it guide second quarter EPS at a $10.15 midpoint and revenue at $1.135 billion. Both of these missed analyst estimates of $2.44 and $1.17 billion. The firm’s full year midpoints of revenue and EPS guidance of $4.62 billion and $10.15 also missed estimates of $4.81 billion and $10.17. This pessimism has also reduced the valuation, with EPAM Systems, Inc. (NYSE:EPAM) currently trading at a forward P/E of 46.30. Consequently, the stock might have bottomed out, and the firm can also see sizeable catalysts from AI adoption in the industry as its software services allow businesses to integrate AI into their operations.
EPAM Systems, Inc. (NYSE:EPAM)’s management shared details about its AI services during the Q2 2024 earnings call:
“Today, I would like to highlight our up-to-date progress in that area and how EPAM is helping clients pragmatically initiate and then move use cases beyond pilots into production deployments. Our current approach to AI transformation is 3 dimensional. Dimension 1, EPAM internal transformation and GenAI enablement investments.
We set an ambition goal for ourselves to upskill and effectively train an absolute majority of the company on the usage of GenAI fundamentals and to do so both responsibly and with the EPAM-level technical depth. A dedicated program was established to execute this. And today, with the help of our educational platforms, internal specialized tools and our global maintenance community, close to 100% of the EPAMers have gone through training and applying AI in their daily work activities. While most of the companies have announced similar programs, we believe that during the last 24 months, our early and highly focused efforts across a broad range of EPAMers allow us to better understand future opportunities and to invest in differentiated IP and accelerators around GenAI-enabled engineering solution.
Our combination of training, IP and open-source style internal initiatives have now become drivers of scale in our advanced GenAI practitioner communities across all EPAM organizational unit and practices. We assume that well over 10% of EPAMers are now advanced GenAI technical practitioners, while over 1,000 are becoming strong internal AI champions with ability to lead GenAI-enabled business solutions. We believe all that has enabled our dimension 2, client transformation opportunities. Our AI client project today has evolved from exploratory pilots and proof-of-concept late last year to now EPAM being selected by clients as a primary AI partner with involvement into hundreds of GenAI-led engagements. We are helping to change the full value chain of SLDC from one side and enabling implementation of real GenAI-driven business use cases from another.”
