Artificial intelligence is no longer just a futuristic buzzword - it’s a transformative force reshaping industries worldwide.
Companies are racing to integrate AI into their operations, but many lack the in-house expertise to do so effectively.
AI consulting is a rapidly growing sector that helps businesses harness machine learning, automation, and data analytics.
As AI products and services become increasingly powerful, the demand for AI consultants to help implement them will only grow.
The mega trend in AI consulting has already caught the attention of investors as these stocks continue to outperform the broader market.
The bullish thesis is clear as day and easy to understand. It's perfect for a Beat Report deep dive.
As businesses across healthcare, finance, retail, and other sectors seek to adopt AI-driven solutions, consulting firms that effectively bridge the gap between cutting-edge technology and real-world applications are positioned for significant growth.
In this report, we'll discuss why AI consulting is one of the hottest trends in the stock market, the leading companies in this space, and how investors can capitalize on this emerging opportunity.
Our AI Consultants Index is breaking out to new all-time highs:
The index resolved a multi-year accumulation pattern last year and quickly hit our initial objective.
Now, it is trading around all-time highs and appears to be kicking off a fresh leg to the upside. If this rally continues, our next price target is firmly within reach.
Long story short, we expect these stocks to remain market leaders going forward.
Let’s talk about the individual components of our index 👇
This is how the five companies stack up in terms of valuation metrics and earnings growth.
And here is a look at their short and intermediate-term performance:
Check out these bubbles:
The y-axis represents the trailing 90-day performance
The x-axis represents the trailing 1-month performance
The size of each bubble reflects the 14-week RSI
As you can see, International Business Machines $IBM is leading the pack, and Infosys $INFY is lagging behind its peers.
Each component of our AI Consultants Index has outperformed the S&P 500 over the last 30 days, but IT and INFY have lagged over the trailing quarter.
We think all these stocks will increase in absolute terms this year, and we expect IBM's relative strength to linger. Here’s why.
Q1 2025 was IBM’s best earnings reaction ever:
The two upper panes of the chart show the actual sales and earnings per share compared to estimates, and the lower pane displays the one-day market reaction to earnings reports.
IBM just printed the second-best single-day performance in its history. And in terms of earnings reactions, it was the best ever.
This was a dot-com bubble superstar. But the market has never been this excited about its fundamentals. I don't think enough investors have IBM on their radar right now.
Their most exciting product is Watson, a suite of artificial intelligence tools and services designed to help businesses integrate AI into their operations.
Many of us know Watson from its 2011 win on Jeopardy. It was supposed to be a big deal, but nothing ever happened.
However, that old robot has since evolved into a powerful and diverse AI platform. Today, it is competing with OpenAI, Google, Meta, and other large language model companies. IBM is once again a leader in innovation.
Here’s how we’re trading IBM:
What a beautiful base breakout this is.
We want to buy IBM on strength above 280, with a target of 400 over the coming 6-12 months. We also like it on any weakness back toward 200, but with how things are going, I wouldn't sit around and wait for it.
This is our top pick in AI consulting.
Now, let’s talk about IBM’s peers 👇
Cognizant $CTSH: Quietly Gaining Market Share
Cognizant may not be the first name that comes to mind when considering AI consulting, but it’s quietly positioning itself as a major player.
The company has been expanding its AI capabilities through aggressive hiring and acquisitions, focusing on automating enterprise workflows and making data-driven decisions.
Cognizant’s stock is currently pressing against the upper bound of a massive accumulation pattern.
The stock could be a sleeper pick with enormous upside potential if the AI consulting boom continues. Looking back at our valuation table, a sound argument could be made that CTSH is undervalued relative to its peers.
Here’s how we’re trading CTSH:
The chart setup is probably undervalued too. A 7-year base breakout is as good as it gets.
We’re buying CTSH on strength above 85, with a target of 113 over the coming 3-6 months. Over longer timeframes, we’re looking at a secondary objective of 158.
This is the most actionable name among these AI consultant stocks. We're buying it right here, right now.
Gartner $IT: The AI Advisory Giant
Gartner plays a crucial role in the AI consulting boom - not just by developing AI solutions but also by advising enterprises on effectively adopting, scaling, and investing in AI.
As a global leader in technology research and advisory services, the company provides essential market insights, helping businesses cut through the AI hype and implement real, revenue-driving strategies.
They are not just helping implement the AI, they are assisting companies in their initial AI investment decisions.
This is the industry leader as far as I'm concerned.
The stock has been in a strong uptrend, benefiting from rising enterprise demand for AI expertise. With corporate AI budgets growing, Gartner’s services are more valuable than ever.
Here’s the bottom line: as AI adoption accelerates, Gartner remains the go-to resource for businesses seeking clarity, strategy, and execution.
Here’s how we’re trading IT:
We want to own IT above 479, with a target of 727 over the coming 3-6 months.
Accenture $ACN: The AI Consulting Powerhouse
Another key player in this trend is Accenture, a global leader in digital transformation and AI-driven consulting.
Accenture has made significant investments in AI, including:
Strategic acquisitions of AI startups to bolster its consulting services
Partnerships with major cloud providers like Microsoft, Google, and Amazon
Enterprise AI adoption, helping Fortune 500 companies implement AI solutions
The stock is on the cusp of resolving a multi-year accumulation pattern. If and when it breaks out, we want to be long.
Here’s how we’re trading ACN:
We want to buy ACN on strength above 387.50, with a target of 477 over the coming 2-4 months.
Infosys $INFY: Struggling to Keep Up
On the other end of the spectrum, Infosys is lagging behind its peers.
While Infosys has AI consulting capabilities, its revenue growth in this segment has been slower than that of IBM, Accenture, and Cognizant.
Technically, the stock has been underperforming and needs to reclaim key levels before it becomes attractive again.
If and when INFY resumes its uptrend, here’s how we’ll trade it:
We want to buy INFY on strength above 22, with a target of 26 and a timeframe of 1-3 months. Over longer timeframes, we’re looking at a secondary objective of 33.50.
Here’s the bottom line
AI consulting is one of the hottest themes in the market, with companies racing to integrate AI into their business models.
As investors, focusing on the leaders in this space - like IBM, Gartner, and Cognizant - is the best course of action to profit for now.
We don't see this mega trend fading any time soon. We only see it picking up steam. We're tracking these companies closely so we'll be ready to position, and re-position accordingly.
With AI adoption accelerating across industries, the AI consulting boom is just getting started.
