Cognizant lowers revenue outlook as cautious IT spending weighs on growth

Wednesday 29 July 2026 - 11:35

By: Sahili Aya

Cognizant lowers revenue outlook as cautious IT spending weighs on growth

Cognizant Technology Solutions has issued a cautious revenue forecast for the coming quarter, signaling continued pressure on corporate technology spending as businesses remain selective about new investments.

The IT services provider said Wednesday that third-quarter revenue is expected to fall between $5.60 billion and $5.68 billion, below the $5.70 billion average estimate from analysts tracked by LSEG. Following the announcement, Cognizant shares declined around 3% in premarket trading.

The weaker outlook reflects a broader slowdown in discretionary technology spending, with many companies delaying non-essential projects amid an uncertain economic environment.

Businesses prioritize infrastructure over software projects

Cognizant said clients are adopting a more cautious approach toward major technology initiatives, particularly large-scale investments and smaller discretionary projects.

As artificial intelligence adoption accelerates, many enterprises are shifting spending priorities toward data center infrastructure and computing capacity needed to support AI applications. This trend has created challenges for traditional software-related investments, where companies are taking a more measured approach.

The company noted that customers are increasingly focused on improving existing technology systems while carefully evaluating the timing and scale of new digital transformation projects.

Annual forecast adjusted amid challenging market conditions

Cognizant has also revised its full-year revenue expectations. The company now anticipates annual revenue between $22.04 billion and $22.35 billion, compared with its previous forecast range of $22.11 billion to $22.64 billion.

The adjustment reflects continued uncertainty in global business conditions and slower decision-making among corporate customers.

Despite these challenges, Cognizant continues to invest in expanding its capabilities in artificial intelligence and digital modernization, helping organizations upgrade older technology platforms and implement generative AI solutions.

Second-quarter results show steady performance

For the second quarter, Cognizant reported revenue of $5.48 billion, matching market expectations and representing a 4.5% increase compared with the same period a year earlier.

The results demonstrate continued demand for technology services, although growth remains constrained by cautious enterprise budgets and changing investment priorities.

As companies accelerate AI adoption, Cognizant is positioning itself to benefit from long-term demand for AI integration, automation, and technology modernization while navigating short-term spending pressures.