TEANECK, N.J., April 29, 2026, 11:02 EDT
- Cognizant’s first-quarter profit topped forecasts, but its revenue outlook for the second quarter landed below what Wall Street was looking for.
- The company rolled out Project Leap, a cost-cutting effort focused mainly on job cuts. It also struck a deal to acquire Astreya.
- The update has fueled investor worries over patchy IT services demand, as clients gauge just how much AI might help them trim expenses.
Cognizant Technology Solutions Corp slipped on Wednesday after the IT services provider projected second-quarter revenue that missed analyst expectations, highlighting how hesitant client budgets remain a drag—even with businesses channeling funds toward artificial intelligence. Shares were last seen at $53.45 in New York, down $1.67.
Cognizant’s outlook is in the spotlight as it tries to pitch investors on two fronts: growing AI-driven demand versus lingering caution in legacy tech spending. The company is guiding for second-quarter revenue between $5.45 billion and $5.52 billion, falling short of the $5.56 billion average analyst forecast from LSEG, Reuters reports.
Cognizant rolled out Project Leap, aiming to push the business further into AI-driven operations. The company is targeting $200 million to $300 million in savings for 2026. But it’s also bracing for $230 million to $320 million in restructuring costs—largely from severance and other personnel-related expenses.
Chief Financial Officer Jatin Dalal didn’t mince words. “This year is more uncertain than last year,” he told reporters, pointing to macro, geopolitical, and industry headwinds. The company stopped short of detailing potential job cuts, but stuck to its target of hiring over 20,000 school graduates in 2026. Reuters
No signs of softness in the first quarter. Cognizant’s revenue hit $5.413 billion, a 5.8% climb year-on-year—3.9% higher if you factor out currency moves. Adjusted EPS landed at $1.40, up 13.8%. Bookings surged 21%, thanks in part to seven major deals inked during the period.
Cognizant CEO Ravi Kumar S flagged another quarter of “sustained bookings momentum,” highlighting financial services as a bright spot. The sticking point for investors: can those big AI-related contracts really make up for the slowdown in tech spending elsewhere, where clients are putting the brakes on or pulling back projects? News | Cognizant Technology Solutions
Cognizant took a step on the M&A side, agreeing to acquire Astreya, an IT services firm specializing in AI infrastructure—the backbone for building and running artificial intelligence systems. Reuters put the deal’s value at roughly $600 million. Cognizant’s announcement didn’t mention a price tag, only that the transaction should wrap up in the second quarter, pending regulatory sign-off.
Kumar said Cognizant will use Astreya’s AI tooling and infrastructure platform to “operationalise” AI systems at scale. Astreya CEO Romil Bahl described the transaction as a “natural next chapter” for the company. According to Cognizant, Astreya runs data center infrastructure, AI lab environments, enterprise networks, and workplace technology at hyperscaler scale. Reuters
India’s leading IT players are still staring at a tough climate. Reuters said last week that revenue growth remains sluggish, as clients rein in budgets and AI keeps margins under strain. Infosys, TCS, and HCLTech have all been linked to softer outlooks or hints of demand cooling.
The catch is execution. Project Leap could boost margins, and Astreya might strengthen Cognizant’s AI offerings, but both hinge on clients moving from pilot projects to meaningful deals. Should budget restraint persist—or if AI tools cut into billable hours faster than they open up new projects—then cost cuts may simply shore up profits instead of fueling expansion.
