Core Insights - CGI Federal Inc. has been awarded a US$64 million contract to modernize the U.S. Environmental Protection Agency's financial management systems, enhancing transparency and efficiency [1] Group 1: Contract Details - The contract is an indefinite delivery/indefinite quantity agreement spanning five and a half years, focusing on expanding CGI's Momentum® Enterprise Suite within the EPA [1] - CGI will integrate artificial intelligence and automation capabilities into the EPA's existing financial management platform, Compass, while optimizing it within the agency's Amazon Web Services (AWS) environment [1] Group 2: Objectives and Benefits - The modernization aims to streamline administrative processes, reduce costs, and improve operational efficiency, aligning with the federal mandate for transparency and accountability [1] - By retiring outdated legacy systems, the EPA will be able to focus on strategic initiatives, leveraging Momentum's scalable design [1] Group 3: Company Background - CGI Federal Inc. is a leading technology and professional services company serving various federal agencies, with nearly 8,000 professionals dedicated to modernizing government through innovative technology solutions [1]

Core Viewpoint - EPAM Systems reported better-than-expected sales and earnings for Q4, yet the stock fell 18.4% due to concerns over GAAP profit performance and year-over-year profit decline [1][4]. Financial Performance - In Q4, EPAM's sales increased by 13% to just over $1.4 billion, and non-GAAP earnings rose by 15% to $3.26 per share, surpassing analyst expectations of $3.16 per share [1][2]. - However, GAAP earnings were only $1.98 per share, which is 39% lower than non-GAAP earnings and represents a 10% year-over-year increase [2][3]. - For the full year, EPAM reported a 15% sales growth to $5.5 billion, with non-GAAP profits up by 6% and GAAP profits down by 14% to $6.72 per share [3]. Future Outlook - EPAM's CEO indicated a focus on scaling AI-native revenues, suggesting potential for future growth despite current profit concerns [4]. - The company anticipates sales growth to slow to about 6% by 2026, but expects earnings to rise to approximately $8.10 per share, a 20% increase compared to the previous year [5]. - With the stock trading at just over $136, the price-to-earnings ratio stands at 16.8x, which may present a buying opportunity for investors [5].

Core Insights - CGI and Schneider Electric are expanding their strategic partnership to provide sustainable end-to-end solutions for energy suppliers in the DACH region, addressing challenges and opportunities in the energy market [1] - The partnership combines CGI's industry expertise with Schneider Electric's advanced solutions for grid operations and planning, including ADMS and GIS [1] - AI is highlighted as a critical component in future transformation projects, enhancing process optimization, cost efficiencies, and sustainability in the energy sector [1] Group 1: Partnership Details - The collaboration aims to support energy suppliers in navigating regulatory complexities and transitioning to renewable energy [1] - Schneider Electric will provide grid operation solutions, while CGI will offer software implementation and system integration as a managed services partner [1] - The partnership builds on over 30 years of collaboration between the two companies, emphasizing technological excellence and industry knowledge [1] Group 2: Industry Context - The energy market is experiencing a shift due to the digitization of networks and increasing regulatory demands, creating both challenges and opportunities [1] - CGI and Schneider Electric are involved in the Digitopia Business Hub of Eurelectric, focusing on digital transformation and common challenges in the energy sector [1] - AI applications are set to be a key topic in 2026, aimed at accelerating decarbonization and improving system efficiency [1] Group 3: Company Profiles - CGI, founded in 1976, is one of the largest independent IT and business consulting firms globally, with reported revenue of CA$15.91 billion for Fiscal 2025 [1] - Schneider Electric is a leader in energy technology, focusing on efficiency and sustainability through electrification, automation, and digitalization, with a workforce of 160,000 employees [1]

Group 1 - UTI Group appointed Romain Aumard as General Director and Jean-Christophe Bernard as a board member following an Extraordinary General Assembly on February 16, 2026 [1] - The majority shareholder of EEKEM Group, which holds 91.12% of UTI Group, has completed the acquisition of 100% of Maltem Consulting Group [1] Group 2 - Maltem Consulting Group specializes in consulting for companies in digital transformation and agile innovation, employing 600 engineers and generating approximately 50 million euros in revenue, with over half coming from international markets [2] - Maltem operates in multiple countries including France, Belgium, Luxembourg, Morocco, Portugal, the USA (New York), Mauritius, Madagascar, Singapore, Hong Kong, and Australia [2] Group 3 - In Morocco, Maltem Africa and its strategic consulting subsidiary Valkima are key players in the digital transformation of businesses [3] - Maltem's subsidiaries, Esokia and Bocasay, are significant offshore players in Mauritius and Madagascar, alongside Astek [3] - In the Asia-Pacific region, Maltem is recognized for data processing and AI, employing over 100 engineers in Australia, Singapore, and Hong Kong [3] - Following the acquisition, Robinson Technologies, the parent company of Astek, UTI Group, and EEKEM Group, will have nearly 11,000 engineers and a pro forma revenue of 850 million euros [3]

Core Insights - The investment landscape in 2025 has been heavily influenced by the rise of Artificial Intelligence (AI) companies, leading to significant market gains across major indices, with the S&P 500 up 17.88% and the Russell 2000 up 12.81% [4] - There is a growing concern about a potential market bubble, as high-quality businesses have underperformed low-quality ones, particularly in the small-cap sector [6][7] - AI-related stocks have dramatically impacted the S&P 500, accounting for 45% of its market cap and 78% of its returns since the launch of ChatGPT in November 2022 [12][15] Investment Performance - FMI's portfolios have generated solid double-digit annual returns over the past three years but have lagged behind broader indices due to a focus on business quality and valuation [5] - The disparity in performance between high-quality and low-quality stocks has been stark, with low-quality stocks outperforming significantly in 2025 [6][7] Market Dynamics - The MSCI EAFE Quality Index has underperformed the MSCI EAFE by approximately 10% in both local and USD terms, indicating a broader trend of low-quality stocks outperforming in international markets as well [8] - The capital spending in the tech sector, particularly related to AI, has contributed significantly to U.S. GDP growth, accounting for 40%-45% through the first nine months of 2025, a stark increase from less than 5% in the same period of 2023 [18] Company Insights - Hayward Holdings Inc. is highlighted as a resilient small-cap company in the pool equipment market, with strong pricing power and a solid balance sheet, despite facing weak demand in the newly built and remodeled pool segments [26] - Accenture PLC is positioned to benefit from the AI boom, as its consulting services are increasingly in demand for enterprises adopting AI technologies, despite facing cyclical pressures [30] - Smiths Group PLC is transitioning to a more focused portfolio, improving its growth and profitability profile while maintaining a strong balance sheet [31] AI Impact - The concentration of AI-related stocks in the S&P 500 raises concerns about market sustainability, as these stocks have driven a significant portion of market returns and earnings growth [12][15] - The capital intensity of AI companies is increasing, with expectations that they will need to generate $2 trillion in revenue by 2030 to meet demand, which may not be achievable [21]

Core Viewpoint - DXC Technology Company is positioned as a noteworthy investment opportunity within the IT consulting sector at its current price level [1]. Company Overview - DXC operates in the information technology sector, specifically within the IT consulting industry [1]. Investment Strategy - The article emphasizes the importance of having both long-term and short-term trading strategies, with a focus on executing a trading plan effectively to achieve positive investment results [1].

Core Viewpoint - International Business Machines Corporation (IBM) is recognized as one of the top AI software stocks to invest in, with analysts raising price targets following the company's strong fourth-quarter results [1][2]. Group 1: Analyst Ratings and Price Targets - Bernstein analyst Mark C. Newman increased IBM's price target from $280 to $330 while maintaining a Market Perform rating after the fourth-quarter results [1]. - Stifel also raised its price target from $325 to $340, keeping a Buy rating after IBM's fourth-quarter performance [2]. Group 2: Financial Performance - IBM's free cash flow showed a significant positive performance, with a $0.7 billion, or 10%, outperformance in the quarter [3]. - The guidance for 2026 free cash flow is projected to be about $0.7 billion, or 4-5%, above market expectations [3]. Group 3: Market Position and Valuation - Despite potential pressures from AI-driven devaluation in the software and consulting sectors, IBM's valuation has remained resilient and continues to expand [2]. - IBM's stock is currently trading at approximately a 35% premium to the equal-weight S&P 500, consistent with its trend over the past twelve months [3].

Financial Data and Key Metrics Changes - In Q1 fiscal 2026, the company reported revenue of CAD 4.1 billion, an increase of 7.7% year-over-year, or 3.4% when excluding foreign exchange impacts [5] - Adjusted EBIT was CAD 655 million, up 7.1% year-over-year, with a margin of 16.1%, down 10 basis points [9] - Adjusted net earnings were CAD 461 million, with a margin of 11.3%, and diluted EPS was CAD 2.12, an increase of 8% compared to Q1 last year [10] - Cash generated from operations was CAD 872 million, representing 21.4% of total revenue, with DSO improving to 37 days [10][11] Business Line Data and Key Metrics Changes - The APAC delivery center reported growth of 5.8%, driven by managed services [5] - The UK and Australia segment grew by 31% due to the acquisition of BJSS, enhancing the company's service offerings [5] - The Western and Southern Europe segment saw a growth of 9%, led by the acquisition of Apside [7] - Managed services had a book-to-bill ratio of 122%, indicating strong demand [8] Market Data and Key Metrics Changes - Bookings in the quarter reached CAD 4.5 billion, resulting in a book-to-bill ratio of 110% [7] - The U.S. commercial and state government segment had a book-to-bill ratio of 169% [7] - The government sector pipeline of opportunities increased by 30% compared to the previous year [16] Company Strategy and Development Direction - The company is focused on a build and buy strategy, emphasizing investments in AI and strategic acquisitions [12][22] - The capital allocation priorities include investing back into the business, pursuing accretive acquisitions, and share buybacks [12][22] - The company aims to leverage its local presence and global scale to enhance client relationships and service delivery [12][22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the U.S. federal market despite recent shutdowns, viewing it as a long-term opportunity [34] - The company anticipates gradual improvement in various industries and geographies, driven by strong client demand for AI and digital transformation [28] - Management highlighted the importance of trust and industry knowledge in navigating the current geopolitical and economic landscape [27] Other Important Information - The board approved a quarterly cash dividend of CAD 0.17 per share, payable on March 20, 2026 [12] - The company has CAD 2.4 billion in capital resources available and a net debt leverage ratio of 1, indicating strong balance sheet capacity [12] Q&A Session Summary Question: Impact of AI volatility on acquisitions - Management stated that AI remains an enabler for future growth and does not change their M&A strategy [32][33] Question: U.S. federal government business outlook - Management believes the federal government remains a strong client despite recent shutdowns, viewing it as a long-term market [34] Question: Margins in U.S. federal business - Margins were impacted by the shutdown, but management expects improvement as operations normalize [40][41] Question: Vendor consolidation trends - Management noted an increase in vendor consolidation among clients, providing opportunities for the company [45][46] Question: Enterprise AI adoption cycle - Management indicated that while many companies have deployed AI tools, realizing outcomes requires addressing data quality and infrastructure challenges [49][56] Question: Internal AI use and margin improvement - Management confirmed that AI is already contributing to efficiency and margin improvements, with expectations for continued gains [60][61]

Core Viewpoint - Accenture (ACN) is positioned as a compelling investment opportunity in the IT Consulting sector, particularly for individual investors looking to enhance their financial assets for retirement [1]. Group 1: Company Overview - Accenture operates within the Information Technology sector, focusing on IT consulting services [1]. Group 2: Investment Strategy - The article emphasizes the importance of having both long-term and short-term trading strategies, with a focus on executing a trading plan effectively to achieve positive investment results [1].

Core Viewpoint - Accenture (ACN) is positioned as a compelling investment opportunity in the IT Consulting sector, particularly for individual investors looking to enhance their financial assets for retirement [1]. Group 1: Company Overview - Accenture operates within the Information Technology sector, focusing on IT consulting services [1]. Group 2: Investment Strategy - The article emphasizes the importance of having both long-term and short-term trading strategies, with a focus on executing a trading plan effectively to achieve positive investment results [1].