Business Strategy - Estée Lauder is launching a digital push to reverse a yearslong sales slump [1] - The company was late to embrace online retail [1] Leadership - The digital push is happening under the new CEO [1]

Core Insights - Atos has been awarded the Golden Certificate by SAP, marking the 10th consecutive certification as a Global Operations Partner, highlighting a strong and enduring partnership [1][4] - Atos is recognized as a SAP Platinum Partner with over 10,000 SAP experts globally, showcasing its extensive expertise and flexible delivery capabilities [2] - The certification reflects Atos's commitment to exceeding customer expectations and strengthening its partnership with SAP [4][5] Company Overview - Atos Group operates with approximately 72,000 employees and generates annual revenue of around €10 billion, functioning in 68 countries under the Atos and Eviden brands [6] - The company is a leader in cybersecurity, cloud services, and high-performance computing, focusing on secure and decarbonized solutions [6][8] Service Areas - Atos has renewed its certification in five core business areas, including Global SAP S/4HANA solutions operations and Global SAP SuccessFactors solutions operations [2][7] - The company supports customers through end-to-end services, from strategy and implementation to ongoing service innovation and management [5]

Core Insights - Sterling Infrastructure, Inc. (STRL) is focusing on large-scale mission-critical projects, particularly data centers, due to a weak housing market, which is positively impacting its revenue visibility and bottom line [1][4] - The demand for data center projects is strong, driven by the rise of Artificial Intelligence and digital transformation, with mission-critical projects making up 51% of the E-Infrastructure segment's backlog [2][3] - STRL's total backlog increased to $2.13 billion, with a year-over-year growth of 27% in the E-Infrastructure segment, indicating robust market trends [2][9] Company Performance - STRL's legacy residential business saw a 19% decline year-over-year, reflecting challenges in the housing market due to high mortgage rates and inflation [3][9] - The company is optimistic about its strategic shift towards mission-critical projects, which is expected to provide continuous revenue flow and mitigate profitability risks [3][4] - STRL raised its 2025 EPS guidance to $8.40-$8.90, indicating a 25.5% growth amid favorable infrastructure trends [9] Competitive Landscape - STRL faces competition from firms like Quanta Services, Inc. and MasTec Inc. in the public infrastructure sector, particularly in mission-critical infrastructure solutions [5] - Quanta's backlog grew 19.6% year-over-year to $16.37 billion, while MasTec's backlog increased by 23.7% year-over-year to $15.88 billion, showcasing strong competition in the market [6][7] Stock Performance - STRL's stock has surged 71.8% in the past three months, outperforming the Zacks Engineering - R and D Services industry and the broader market [8] - The stock is currently trading at a forward P/E ratio of 26.6, indicating a premium valuation compared to industry peers, reflecting strong market potential [11] - Earnings estimates for 2025 and 2026 remain unchanged at $8.61 and $9.48 per share, respectively, with year-over-year growth of 41.2% and 10.1% [13]

Core Insights - The year 2025 is expected to be a turning point in global healthcare, driven by digital transformation and operational pressures, with significant backing from initiatives like Trump's $500 billion Stargate AI project [1][6] - The Medical Info Systems industry is projected to grow rapidly, with the health tech market anticipated to expand from $880 billion in 2025 to $3.3 trillion by 2034, driven by demand for telehealth, AI, IoMT, and cybersecurity [1][2] Industry Overview - The Zacks Medical Info Systems industry includes companies that develop healthcare information systems, providing software and hardware solutions for secure access to real-time data [3] - The focus on patient satisfaction and data security has increased the demand for big data, cloud computing, blockchain, and AI solutions [3] Trends Impacting the Industry - AI adoption in healthcare is significant, with applications in drug synthesis, diagnostics, and patient monitoring, supported by initiatives like the Stargate project [4] - The global AI in healthcare market is projected to reach $95.65 billion by 2025, indicating strong growth potential [4] - The demand for remote healthcare is increasing, with the smart healthcare products market valued at $145.9 billion in 2023 and expected to grow to $485.71 billion by 2032, at a CAGR of 12.78% [5] Challenges Facing the Industry - The $500 billion Stargate AI initiative faces challenges from new tariffs, which have increased costs for critical AI infrastructure by 10-25%, leading to delays in hardware upgrades [6] - Tariffs on copper, aluminum, and steel are expected to raise production costs, with 88% of healthcare executives anticipating price hikes of at least 18% [6] Industry Performance - The Zacks Medical Info Systems industry ranks 88, placing it in the top 36% of over 250 Zacks industries, indicating strong near-term prospects [8] - The industry has outperformed the S&P 500 and the Zacks Medical sector over the past year, gaining 12% compared to the sector's decline of 15.4% [10] Current Valuation - The industry is currently trading at a forward price-to-sales (P/S) ratio of 5.54X, compared to the S&P 500's 5.25X and the sector's 2.23X [13] Investment Opportunities - Companies like Veeva Systems, 10x Genomics, and Insight Molecular Diagnostics are highlighted as potential investment opportunities, with strong earnings outlooks [2][18][21][25] - Veeva Systems is expected to report a 15.8% improvement in fiscal 2026 earnings, with revenue growth of 12.8% [19] - 10x Genomics anticipates a 27.8% jump in earnings for 2026, with revenue growth of 5.8% [22] - Insight Molecular Diagnostics projects a 43.5% increase in earnings for 2025 [26]

Core Insights - Cognizant and Kramp are collaborating to establish a cost-effective and agile IT platform aimed at enhancing operational efficiency, improving customer experience, and driving business growth [1][4] - Kramp is transitioning from a legacy system to a modern, data-driven ERP solution to facilitate market expansion and significant business growth [2][3] Company Overview - Cognizant is a leading technology company that helps clients modernize technology, reimagine processes, and transform experiences to stay competitive in a fast-changing environment [5] - Kramp is Europe's leading technical wholesaler of spare parts and accessories for the agriculture, forest & landscaping, and construction industries, operating in over 20 European countries with more than 3,500 employees [6] Project Objectives - The new ERP system will integrate commerce, supply chain management, warehousing, and finance, aiming to create a unified IT platform that enhances operational efficiency and minimizes customer demand response time [3] - The collaboration is seen as a long-term partnership focused on simplifying and standardizing processes to create incremental business value for Kramp [3][4] Strategic Importance - The initiative is expected to transform Kramp into an agile organization capable of effectively addressing customer needs and adapting to rapidly evolving market demands [4] - Cognizant emphasizes the importance of understanding foundational elements for long-term success and addressing challenges in becoming future-ready [4]

Group 1 - Townsquare Media, Inc. (NYSE: TSQ) stock has seen a moderate price rebound since April, recovering from the impact of tariff concerns [1] - The rebound in TSQ shares is attributed to fading worries about tariffs and their potential effects on the company [1]

Core Insights - Pegasystems (PEGA) shares have increased by 6.9% year to date (YTD), underperforming the broader Zacks Computer & Technology sector, which has appreciated by 7.4%, and key competitors like Microsoft (MSFT), Oracle (ORCL), and IBM, which have seen increases of 19.4%, 38.4%, and 29% respectively [1][2][8] Performance Analysis - The underperformance of PEGA shares is attributed to a challenging macroeconomic environment and intense competition from Microsoft and Oracle in the business process management sector [2] - Despite the challenges, Pegasystems is experiencing strong demand for its AI-powered and cloud-based solutions, with the market expected to exceed $130 billion by 2027 [6][11] - PEGA's Annual Contract Value (ACV) rose by 23% year over year to $701 million, driven by the adoption of Pega GenAI Blueprint and a shift towards term-based licensing [8][11] Revenue and Growth Projections - Pegasystems forecasts revenues of $1.7 billion for 2025, an increase from previous guidance of $1.6 billion, supported by growing ACV and market momentum [15] - The company anticipates free cash flow to grow at a compound annual growth rate (CAGR) of 15-20%, reaching over $700 million by 2028 [15] Market Position and Valuation - Pegasystems is currently trading above its 50-day and 200-day moving averages, indicating a bullish trend [6] - However, PEGA shares are considered overvalued, with a trailing 12-month Price/EBITDA (P/EBITDA) ratio of 23.79X, compared to the Zacks Computer Software market's 20.32X and IBM's 15.35X [18] Investment Outlook - Pegasystems is recognized for its strong portfolio, expanding ACV, and robust free cash flow generation capabilities, currently holding a Zacks Rank 1 (Strong Buy) and a Growth Score of A, indicating a favorable investment opportunity [21]

Core Insights - Nokia has been selected to deploy a private 5G network for Memphis Light, Gas and Water (MLGW), marking a significant step in the utility's grid modernization initiative [1][5] - This project positions MLGW as the first municipal utility in the U.S. to implement a full-scale standalone 5G private wireless network, enhancing service for over 420,000 customers [2][5] - The deployment aims to improve communication, operational efficiency, and resilience across MLGW's electric, gas, and water services [2][4] Group 1: Project Details - The private 5G network will support real-time communication and automation for critical applications such as automated meter reading, grid monitoring, and fault detection [4][6] - Nokia's solution includes AirScale radio access equipment, a 5G Core Enterprise Solution, and a microwave backhaul solution, along with managed services and cybersecurity products [6][8] - The initiative is expected to enhance power distribution, reduce outages, and improve service restoration efficiency [8][4] Group 2: Strategic Importance - The collaboration signifies a major milestone in MLGW's commitment to building a smarter and more resilient utility infrastructure [5][8] - Nokia's leadership in delivering end-to-end private wireless networks is highlighted as a key factor in enabling utilities to accelerate digital transformation [5][10] - The project lays the groundwork for future technologies, including electric vehicles and battery storage, supporting a modern electric grid [3][4]

Group 1 - The recent wave of closures among retail and dining establishments in Hong Kong, including long-established restaurants, has raised societal concerns, leading to the term "closure wave" being used [1] - Despite some closures, new establishments are opening, indicating a dynamic market that requires a rational perspective on the situation [1] - The opening of a new 24-hour branch of the century-old tea house "Lin Heung Tea House" in Tsim Sha Tsui and the entry of mainland brands like "Da Rong Shu Xia" reflect confidence in the Hong Kong market [3] Group 2 - In May, Hong Kong's retail sales increased by 2.4% year-on-year, ending a 14-month decline, with both local and non-local companies reaching record numbers [3] - The expected economic growth for Hong Kong this year is between 2% and 3%, indicating a positive trend in the economy and business environment [3] - The transformation of market supply and demand, along with changing consumer patterns, is impacting traditional businesses, necessitating adaptation and innovation [4] Group 3 - The Hong Kong government has introduced measures to assist small and medium-sized enterprises (SMEs) during the transition period, including a dedicated fund for market expansion and digital upgrades [5] - The "Hong Kong Good Goods Festival" has been launched to support SMEs in developing e-commerce, with reports of significant revenue increases for participating businesses [5] - Continuous innovation and willingness to adapt are essential for businesses to thrive in the competitive market, as evidenced by successful transformations of various operators [5]

Investment Rating - The report assigns a "Buy" rating to several companies including Accenture, IBM, Fujitsu, NEC, and EPAM, while Cognizant and Globant are rated as "Neutral" [28][19][12]. Core Insights - The global IT services industry is facing macroeconomic headwinds that are likely to persist, delaying a broader recovery in discretionary spending until 2026 [1]. - In India, the IT services sector is expected to experience low-single digit revenue growth for FY26, with limited visibility on discretionary demand [2]. - Japan's IT services market remains strong, driven by modernization needs and a tight supply of system engineers, allowing for price increases [3]. - In the US, ongoing uncertainty in IT budgets is causing clients to delay discretionary spending, particularly in sectors like Healthcare and Manufacturing [4]. Summary by Region India - After two rounds of cuts, revenue growth estimates for FY26 have been modestly raised, but growth is expected to remain below FY25 levels [2]. - The sector is projected to see a -0.4% quarter-over-quarter revenue growth for 1QFY26, with a YoY growth of +0.9% [9]. - Companies like Infosys and HCL are expected to raise their revenue growth guidance slightly [9]. Japan - The demand for IT services in Japan is robust, driven by the need to replace legacy systems and improve productivity [3][12]. - Major players like Fujitsu and NEC are well-positioned to benefit from this demand, with forecasts indicating significant profit growth [13][14]. - The financial and public sectors are consistently investing in digital transformation, which is expected to continue [16]. United States - US IT services providers are experiencing muted performance due to uncertainty in IT budgets, with some sectors showing resilience [4][17]. - Companies are reporting stable demand in Financial Services, but there are headwinds in Healthcare and Manufacturing [19]. - Management teams are indicating some signs of demand stabilization, particularly in select verticals [17][20].