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Infosys (INFY) BPM & IBM Launches Center of AI and Automation

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Infosys’ (INFY - Free Report) wholly owned subsidiary, Infosys BPM, recently announced that it has unveiled the Center of AI and Automation at the company’s Business Experience Lounge in Poland, in collaboration with International Business Machines (IBM - Free Report) , to enhance the digital capabilities of global enterprise clients in the AI and hybrid cloud spaces.

The newly opened business unit exhibits an extended portfolio of data and artificial intelligence (AI) solutions built to automate and accelerate the hybrid cloud transformation of enterprises globally. It intends to enable enterprises to address complex business process challenges at scale across domains and industries. This, in turn, will help optimize enterprise cost structure and improve productivity and user experiences.

The center will allow both Infosys and IBM clients to analyze workflows, design AI-infused apps with low-code tooling, assign tasks to bots, and track performance on the go. Further, they will get hands-on access to various digital solutions across the data, AI, and hyper-automation spaces. Some of those solutions are Infosys Intelligent Document Processing, Infosys Interaction Analytics, Infosys Multilingual Conversational AI, Infosys Accounts Payable on Cloud, Infosys Cortex, Infosys Material Master Harmonization, and Infosys Data Workbench from Infosys BPM.

The portfolio will also include IBM CloudPak for Data, IBM Watson Assistant & IBM Watson Discovery, IBM SaferPayments, IBM Blockchain, IBM Sterling Supply Chain, IBM Risk and Fraud Detection software, and Envizi for Sustainability.


Infosys BPM’s Center of AI and Automation, which emphasizes a two-year agreement with IBM, is launched to commemorate the subsidiary firm’s 15th anniversary.

Infosys has been reinforcing its digital-transformation capabilities to expand and solidify its position in the highly competitive environment. It enables its clients across more than 45 countries to create and execute strategies for their digital transformation. Such efforts in the digital-transformation business will aid the company in competing with peers like Accenture and Cognizant.

In September, Infosys collaborated with Bpost (Belgium Post), a postal operator and e-commerce logistics provider headquartered in Brussels, to provide cloud security solutions that will identify and ensure rapid response to suspicious security events.

In the same month, Infosys collaborated with Spirit AeroSystems, Inc., one of the world’s largest manufacturers of aerostructures for commercial airplanes, defense platforms, and business/regional jets. Per the five-year contract, the IT company intends to offer end-to-end aerostructure and systems engineering services for product development of commercial, business jet and emerging aircraft programs.

Back-to-back contract wins are driving Infosys’ top-line performance. In the last reported financial results for second-quarter fiscal 2023, the company’s revenues jumped 13.9% year over year to $4.56 billion.

Nonetheless, Infosys’ near-term growth prospects are likely to be hurt as organizations are postponing their plans of investing in big and expensive technology products on growing global slowdown concerns amid the current macroeconomic challenges and geopolitical tensions. Moreover, elevated operating expenses related to hiring new employees and sales and marketing strategies to capture more market share are likely to strain margins in the near term.

These, along with the rapid proliferation of customizable Internet-based software, have been hampering Infosys’ traditional outsourcing business. These challenges might weigh on the company’s profitability going ahead.
Shares of INFY have dropped 18.6% while IBM jumped 21.8% in the past year.

Zacks Rank & Stocks to Consider

Infosys and IBM currently hold Zacks Rank #3 (Hold).

Some better-ranked stocks from the broader Computer and Technology sector are Celestica (CLS - Free Report) and Fabrinet (FN - Free Report) . While Celestica flaunts a Zacks Rank #1 (Strong Buy), Fabrinet carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Celestica’s fourth-quarter 2022 earnings has increased by 9 cents to 53 cents per share over the past 30 days. For 2022, earnings estimates have moved 16 cents up to $1.86 per share in the past 30 days.

CLS' earnings beat the Zacks Consensus Estimate in all the preceding four quarters, the average surprise being 11.8%. Shares of the company have moved up 1.1% in the past year.

The Zacks Consensus Estimate for Fabrinet's second-quarter fiscal 2023 earnings has been revised 16 cents northward to $1.89 per share over the past seven days. For fiscal 2023, earnings estimates have improved by 7.6% to $7.48 per share in the past seven days.

FN’s earnings beat the Zacks Consensus Estimate in three of the preceding four quarters, missing once, the average surprise being 5.4%. Shares of the company have gained 5.4% in the past year.

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