Core Thesis - Globant S.A. is positioned for a strong rebound despite a 73% year-to-date decline, driven by core demand for IT services expected to recover by 2026 due to increasing IT spending and AI adoption [1][2] Company Overview - Globant S.A. provides technology services globally and is strategically shifting towards higher-growth segments such as Data Center Systems, AI pods, and subscription-based models [1] - The company has a robust backlog across promising industries, which supports its growth initiatives [1] Valuation and Market Position - As of February 11th, Globant's share was trading at $55.47, with trailing and forward P/E ratios of 25.33 and 8.93 respectively [1] - The stock trades at a 15–25% discount relative to peers, indicating a market mispricing of its long-term potential [2] - On a discounted cash flow basis, Globant offers over 200% potential upside, highlighting a favorable risk/reward profile [3] Growth Initiatives - The company's strategic investments in AI and high-growth digital services are expected to create opportunities for equity appreciation and operational leverage [3] - Initiatives focused on AI-related services are anticipated to drive sustainable growth and margin expansion [2] Competitive Landscape - Despite short-term headwinds and muted analyst sentiment, risks such as slower backlog conversion and intensified competition are largely priced into the current stock level [2] - The investment case for Globant is strengthened by its unique positioning in the technology sector, combining an undervalued market price with significant catalysts for long-term growth [3]

Core Insights - RingCentral (RNG) reported quarterly earnings of $1.18 per share, exceeding the Zacks Consensus Estimate of $1.14 per share, and up from $0.98 per share a year ago [1] - The company achieved a revenue of $644.03 million for the quarter, surpassing the Zacks Consensus Estimate by 0.27%, compared to $614.51 million in the same quarter last year [3] Earnings Performance - The earnings surprise for the quarter was +3.69%, and the company has surpassed consensus EPS estimates in all four of the last quarters [2] - RingCentral's shares have increased by approximately 2.4% since the beginning of the year, outperforming the S&P 500's gain of 0.5% [4] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $1.07 on revenues of $639.58 million, and for the current fiscal year, it is $4.69 on revenues of $2.62 billion [8] - The estimate revisions trend for RingCentral was unfavorable prior to the earnings release, resulting in a Zacks Rank 4 (Sell) for the stock, indicating expected underperformance in the near future [7] Industry Context - The Internet - Software and Services industry, to which RingCentral belongs, is currently ranked in the bottom 43% of over 250 Zacks industries, suggesting potential challenges ahead [9] - Comparatively, Globant (GLOB), another company in the same industry, is expected to report a year-over-year earnings decline of 12% in its upcoming results [10]

Core Insights - Sabre (SABR) reported a quarterly loss of $0.01 per share, better than the Zacks Consensus Estimate of a loss of $0.07, representing an earnings surprise of +84.62% [1] - The company posted revenues of $666.53 million for the quarter ended December 2025, surpassing the Zacks Consensus Estimate by 2.02%, but down from $714.72 million year-over-year [2] - Sabre shares have declined approximately 31% since the beginning of the year, contrasting with the S&P 500's zero return [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.03 on revenues of $742.1 million, and for the current fiscal year, it is $0.12 on revenues of $2.86 billion [7] - The estimate revisions trend for Sabre was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market [6] Industry Context - The Internet - Software and Services industry, to which Sabre belongs, is currently ranked in the bottom 36% of over 250 Zacks industries, suggesting potential challenges for stock performance [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact investor sentiment [5]

Group 1 - Globant S.A. is recognized as one of the best high growth European stocks to buy, with UBS raising its price target to $75 from $70 while maintaining a Neutral rating [1] - The company is expected to report a 6% year-over-year decrease in revenue to $607 million for Q4 2025, slightly above its own projection of $605 million [1] - UBS predicts a decline in Globant's adjusted gross margin to 37.8% due to foreign exchange challenges, while the adjusted EBIT margin is expected to rise to 15.3%, surpassing the company's guidance of "at least" 15% [2] Group 2 - UBS forecasts a 1.6% year-over-year growth for Globant in 2026, indicating stabilization in the IT services market without significant improvement since 2025 [3] - The firm sees potential for expansion from new clients such as Riot Games and YPF, but prefers to wait for implementation before making a more positive assessment [3] Group 3 - Globant S.A. specializes in providing digital and cognitive transformation services for businesses, focusing on creating "digitally-native" products and assisting organizations in evolving their technology and business strategies [4]

Core Insights - Innodata Inc. (INOD) is well-positioned to benefit from the rapid growth of U.S. AI investment, with strong operating momentum and a business model closely linked to generative AI development [1][4] - The company reported record revenues of $62.6 million in Q3 2025, a 20% increase year-over-year, and adjusted EBITDA of $16.2 million, reflecting a 26% margin [1][11] - Management anticipates 45% organic revenue growth in 2025 and transformative growth in 2026, supported by new contracts and investments in pre-training data [2][11] Financial Performance - Innodata's Q3 2025 revenues reached $62.6 million, up 20% year-over-year, with adjusted EBITDA at $16.2 million, representing a 26% margin [1][11] - Future contracts related to pre-training data and federal AI initiatives could contribute approximately $93 million to future revenues [11] - The Zacks Consensus Estimate for INOD's earnings has increased to 89 cents for 2025 and $1.20 for 2026, reflecting positive market sentiment [13] Market Positioning - Innodata serves as a picks-and-shovels provider for large AI model builders, establishing strong relationships with major Big Tech companies [2][4] - The launch of Innodata Federal targets U.S. defense and civilian agencies, with an expected contribution of around $25 million in revenues, primarily in 2026 [3] - The company has a solid cash position of $73.9 million and no debt, providing flexibility for future investments [3] Competitive Landscape - Innodata operates in a competitive niche with key competitors including Globant SA and Cognizant Technology Solutions [5] - Globant is enhancing its AI capabilities through strategic investments and acquisitions, positioning itself alongside Innodata in enterprise AI initiatives [6] - Cognizant competes with its extensive IT consulting and business process services, capturing enterprise and government contracts that overlap with Innodata's target markets [7][8] Valuation Metrics - Innodata's shares have increased by 34.1% over the past year, significantly outperforming the industry's growth of 4.4% [9] - The company currently trades at a forward price-to-earnings ratio of 44.33, which is considerably higher than the industry average of 16.99 [15]

Group 1: Blockchain Stocks Overview - Five notable blockchain stocks to watch include Core Scientific, Globant, Argo Blockchain plc 8.75% Senior Notes due 2026, Figure Technology Solutions, and Bitdeer Technologies Group, identified by MarketBeat's stock screener tool [2] - "Blockchain stocks" refer to publicly traded companies involved in blockchain and distributed ledger technologies or holding significant cryptocurrency-related assets, covering a wide spectrum from developers to legacy firms [2] Group 2: Core Scientific (CORZ) - Core Scientific, Inc. provides digital asset mining services in North America, operating through Mining and Hosting segments [3] - The company offers blockchain infrastructure, software solutions, and services, and operates data center mining facilities while also mining digital assets for its own account [3] Group 3: Globant (GLOB) - Globant S.A. provides technology services globally, including digital solutions in blockchain, cloud technologies, cybersecurity, data and AI, and enterprise technology solutions [4] Group 4: Argo Blockchain plc (ARBKL) - Argo Blockchain offers a platform for users to mine bitcoin, ethereum, and other altcoins from home with a transparent monthly fee [5] Group 5: Figure Technology Solutions (FIGR) - Figure is focused on building the future of capital markets using blockchain technology, enhancing lending, trading, and investing activities [6] Group 6: Bitdeer Technologies Group (BTDR) - Bitdeer Technologies Group operates in blockchain and computing, offering hash rate sharing solutions and one-stop mining machine hosting services [7]

Summary of IT Services Industry Outlook and Key Insights Industry Overview - The IT Services industry is expected to see improved demand in 2026 as AI proof-of-concept projects transition to broader enterprise implementations, particularly benefiting consulting services [1][4] - Despite the anticipated improvements, the narrative surrounding AI disruption in IT Services is expected to persist, although it may diminish as the complexities of enterprise AI become more recognized [2][37] Key Insights Demand and Spending Trends - IT Services spending is projected to improve year-over-year for the first time in four years, shifting from infrastructure-focused spending to include applications and services [3][4] - Global IT spending is expected to reach $6.1 trillion in 2026, growing by 10% year-over-year [20] Business Model Evolution - Business models are evolving from time and materials to more outcome-based pricing, although this transition will not be universal due to varying complexities [5][62] - The shift towards outcome-based pricing is seen as a potential for higher margins, despite initial perceptions of deflationary pressures [62] Margins and Valuations - Margins are expected to be managed flat to slightly higher, but ongoing investments in AI may limit significant upside [5][84] - IT Services firms are currently experiencing depressed valuations, with multiples at historic lows, making it an attractive entry point for investors [6][34][92] Top Picks in IT Services - The top picks for large, mid, and small-cap companies within the IT Services sector are Cognizant (CTSH), EPAM Systems (EPAM), and Grid Dynamics (GDYN), respectively [1][15] - Cognizant is expected to see organic growth exit 2026 at a mid to high single-digit pace, while EPAM and GDYN are projected to improve their growth rates significantly [15][19] AI and Partnerships - Partnerships with IT Services firms are becoming increasingly vital for AI companies, as they often lack the sophistication to manage enterprise workflows independently [3][78] - The emergence of "killer use cases" in AI is anticipated to drive increased investment in growth-oriented initiatives, necessitating back-end modernization [4][59] Market Performance - The IT Services sector has underperformed the S&P 500 for four consecutive years, with a year-to-date decline of 26% [28][31] - Despite the underperformance, the sector is expected to outperform in 2026 as multiples re-rate higher due to improved growth prospects [6][34] Future Outlook - The complexity of enterprise AI is significantly underestimated, indicating a continued need for IT Services expertise as enterprises transform [10][44] - The overall sentiment suggests that while AI disruption fears remain, the reality of implementing enterprise AI will require specialized knowledge and support from IT Services firms [2][44] Conclusion The IT Services industry is poised for a recovery in 2026, driven by a shift in spending patterns and the maturation of AI applications. While challenges remain, particularly regarding valuations and the ongoing narrative of AI disruption, the sector presents potential investment opportunities, especially in firms that are adapting their business models and forming strategic partnerships.

Core Viewpoint - The BBH Select Series - Mid Cap Fund experienced a decline in Q3 2025, underperforming the Russell Midcap Index, which indicates challenges in the mid-cap investment space during this period [1]. Fund Performance - The fund decreased by -0.9% on a total return basis in Q3 2025, while the Russell Midcap Index returned 5.3% [1]. - Year-to-date, the fund has a total return of -1.8%, compared to a 10.4% return for the Index [1]. - The third quarter saw a continuation of a low-quality rally that began late last year, gaining momentum throughout 2025 [1]. Company Focus: ITT Inc. - ITT Inc. (NYSE:ITT) was highlighted as a key stock in the fund's Q3 2025 investor letter [2]. - The one-month return for ITT Inc. was -6.97%, but it gained 12.95% over the last 52 weeks [2]. - As of December 10, 2025, ITT Inc. closed at $171.87 per share, with a market capitalization of $14.607 billion [2]. Investment Decisions - The fund initiated two new positions in Q3 2025: ITT Inc. and BJ's Wholesale Club Holdings Inc. [3]. - The fund exited positions in Globant, Bruker, and Bright Horizons Family Solutions Inc. during the same quarter [3].

Core Insights - The BBH Select Series - Mid Cap Fund experienced a total return decrease of -0.9% in Q3 2025, underperforming the Russell Midcap Index which returned 5.3% [1] - Year-to-date, the fund's total return is -1.8%, compared to the Index's 10.4% [1] - The third quarter saw a continuation of the low-quality rally that began late last year, gaining momentum throughout 2025 [1] Company Highlights - Bruker Corporation (NASDAQ:BRKR) was highlighted in the fund's Q3 2025 investor letter, focusing on its development and manufacturing of scientific instruments and analytical solutions [2] - Bruker Corporation's one-month return was 12.28%, but it has lost 19.82% of its value over the last 52 weeks [2] - As of December 10, 2025, Bruker Corporation's stock closed at $46.92 per share, with a market capitalization of $7.129 billion [2] Performance Detractors - The largest detractors to the fund's performance in Q3 2025 included Shift4 Payments Inc., Globant S.A., and Bruker Corporation [3] - The fund exited positions in both Globant and Bruker during the quarter due to sustained underperformance and to opportunistically harvest tax losses [3] - Bruker Corporation was notably impacted by tariffs and cuts in life science and academic funding, with any potential re-entry into the stock contingent on performance stabilization [3]

Core Insights - The BBH Select Series - Mid Cap Fund experienced a total return decrease of -0.9% in Q3 2025, underperforming the Russell Midcap Index which returned 5.3% [1] - Year-to-date, the fund's total return is -1.8%, significantly lower than the Index's 10.4% return [1] - The third quarter saw a continuation of the low-quality rally that began late last year, gaining momentum throughout 2025 [1] Company Performance - Globant S.A. (NYSE:GLOB) had a one-month return of 11.28%, but its shares have lost 68.83% of their value over the past 52 weeks [2] - As of December 09, 2025, Globant S.A. closed at $68.74 per share, with a market capitalization of $3.028 billion [2] Fund Detractors - The largest detractors to the fund's performance in Q3 2025 included Shift4 Payments Inc., Globant S.A., and Bruker Corp. [3] - The fund exited positions in both Globant and Bruker during the quarter due to sustained underperformance and to opportunistically harvest tax losses [3] - Globant and Bruker were notably impacted by tariffs and cuts in life science and academic funding, with any potential re-entry into these positions dependent on performance stabilization [3]