Globant goes all-in on AI overhaul to rebuild from 80% sell-off

Argentina's Globant has decided to invest heavily in artificial intelligence (AI) in an attempt to revive its fortunes after its market capitalization fell by 80% since early 2025. CEO Martín Migoya aims to build up Globant's AI business, harnessing the US$700 billion being invested globally in AI infrastructure, which he believes will eventually result in spending on services that Globant provides.

The company recently introduced Glob.AI, a platform allowing clients to access AI Pods, where agents collaborate under engineer supervision to deliver consulting work previously requiring two months, now completed in days.

Migoya noted that the company is creating an industry from scratch, likening the situation to the early days of cloud computing. Founded in Buenos Aires in 2003, Globant evolved from a startup into a global technology-services firm. In 2014, it became the first Latin American software company to list on the New York Stock Exchange, generating significant revenue through clients such as Walt Disney Co., which accounts for nearly 10% of its revenue.

Globant's primary revenue sources are North American clients, while Europe and Latin America contribute the remainder.

Despite experiencing a stock rout in February 2025, which made Globant the second-worst performer among its peers and reduced its value to less than US$2 billion from US$13 billion in 2021, Migoya is not abandoning traditional services. Instead, he seeks to transition the business toward the new model, anticipating higher margins and a more sustainable future.

Globant recently appointed former Amazon Web Services executive Sarab Narang to lead its AI initiative, which is estimated to account for four to six percent of revenue by year-end.

Some Wall Street analysts remain optimistic about a potential turnaround, with Morgan Stanley identifying Globant as its "favorite play for an eventual industry re-acceleration." Morgan Stanley expects AI services to reach 20% of revenue by the end of the decade. Rivals, including EPAM Systems Inc and Cognizant Technology Solutions Corp, are also investing in AI and restructuring their services.

Analysts consider Globant's aggressive AI push and willingness to risk cannibalizing its traditional business as its key differentiators.

However, the stakes are high, and the company faces challenges, including delayed projects in the Middle East, stronger currencies in Latin America, and the need to compensate for revenue lost as traditional jobs become more efficient with fewer engineers and faster completion times. Globant recently cut its full-year revenue forecast due to these challenges.

The company has been buying back shares, which have since rebounded nearly 30% since hitting a decade-low in late June. Despite this progress, analyst Steven Wahrhaftig of Wedbush has cut his target price on the shares to US$37 from US$54, citing concerns that the company's old business may deteriorate faster than AI Pods can replace it.