Globant goes all-in on AI overhaul to rebuild from 80% sell-off

Argentine software firm Globant SA is betting that the technology responsible for wiping out 80 percent of its market cap since early 2025 can also reinvent the business that once made it one of Latin America’s biggest tech success stories.

Chief Executive Officer Martín Migoya is looking to build out the firm’s AI business, saying the US$700 billion that technology giants are investing in Artificial Intelligence infrastructure will eventually translate into spending elsewhere in the ecosystem, including the services Globant provides.

The company launched Glob.AI, a platform that gives clients access to AI Pods where agents work under the supervision of engineers, doing consulting work that previously required nearly two months in a matter of days, according to the company.

“We’re creating an industry from scratch, and that’s not something that happens every year,” Migoya said in an interview at the company’s offices in Buenos Aires. “This is like the early days of the cloud, when people didn’t really understand what it was.”

Founded in Buenos Aires in 2003, Globant grew from a startup into a global technology-services firm and in 2014 became the first Latin American software company to list on the New York Stock Exchange. It builds software and digital products for companies including Walt Disney Co., which alone accounts for nearly 10 percent of its revenue. About half of its sales comes from clients in North America, with Europe and Latin America accounting for most of the rest.

A stock rout that began in February 2025 has made Globant the second-worst performer among a basket of industry peers, with losses over four times those of the benchmark Bloomberg World IT Services index. It’s worth less than US$2 billion today, from US$13 billion at the end of 2021. 

“The market is pricing in a structural reset rather than a cyclical slowdown for Globant and IT services peers,” said Nate Svensson, senior equity analyst at Deutsche Bank.

Migoya isn’t cutting the cord on traditional services, which still account for the vast majority of revenue. Still, he wants to shift more of the business toward the new model, which he expects will eventually deliver higher margins and a more sustainable business. The company recently appointed former Amazon Web Services executive Sarab Narang to spearhead its AI initiative, which it estimates will account for four to six percent of revenue by year-end.

Some on Wall Street see the potential for a turnaround, with Morgan Stanley calling Globant its “favourite play for an eventual industry re-acceleration,” even after trimming its forecasts this year. Its expectation is that AI services could reach 20 percent by the end of the decade.

Globant’s rivals are also investing heavily in AI and experimenting with how they structure their services. EPAM Systems Inc is building what it calls an “AI-native” delivery model, while Cognizant Technology Solutions Corp is embedding AI more deeply into its services and gradually moving away from the traditional practice of billing clients by the hour. What distinguishes Globant, analysts say, is the aggressiveness of its AI push and its willingness to risk cannibalising its traditional business to accelerate the shift.

“The AI Pod model – how they’re driving sales and how they’re shifting the business aggressively – is the differentiator,” said Bryan Keane, head of North America payments processors and IT services research at Citigroup. “The good news here on Globant is they’re kind of going all in on AI pods.”

The stakes are high for the company, which employs about 27,400 people and operates across the United States, Europe, Latin America and India. The new push amounts to a wager that AI will create enough new work – and make existing projects sufficiently more profitable – to compensate for revenue lost as the same jobs are completed with fewer engineers and faster. 

“I recognise it is a difficult moment, but I also think it is a foundational moment,” Migoya said. “The opportunity is truly enormous – what’s still missing is deeper conviction from shareholders.”

Investors are enduring some of that near-term pain. Globant cut its full-year revenue forecast in August after reporting second-quarter earnings as it grappled with AI, delayed projects in the Middle East amid the war in Iran and stronger currencies in Latin America that have raised labor costs. 

Globant has been buying back shares, taking advantage of what Migoya has described as one of the highest-return investments available to the company. The stock has bounced back nearly 30 percent since hitting a decade-low in late June. 

Steven Wahrhaftig, an analyst at Wedbush, slashed his target price on the shares to US$37 from US$54, one of the largest cuts on concern the old business may deteriorate faster than AI Pods can replace it.

“It’s the fact that they’re willing to risk their legacy business for this new business-model approach,” he said. “Long term, they could prove this wrong. The question is, when is the future going to be?”