Berenberg initiated coverage of Cognizant and Accenture with Buy ratings, arguing the IT services sector is resetting as artificial intelligence reshapes demand. The broker sees large, embedded vendors moving up the value chain, though it expects only moderate sector growth after a cyclical trough in FY24.

The analyst notes that AI is disrupting the labour-intensive delivery model, making employee productivity a key differentiator. Cognizant leads peers with 8% year-on-year revenue growth per full-time employee, while Accenture also shows clear gains. Berenberg expects the largest market gains to accrue to scaled players deeply embedded in client operations.

Berenberg's top pick is Cognizant, forecasting revenue acceleration through FY27 on management changes and AI investment. Accenture is seen well-positioned for share gains due to its scale. In contrast, Capgemini faces headwinds from weaker discretionary demand in France and automotive sectors, with slower margin progress.