An analyst downgraded DXC Technology to a "Sell" rating. The downgrade cites risks that the company's artificial intelligence initiatives will not counteract ongoing revenue declines. DXC also faces vulnerability to GenAI disruption in its core business.
The firm's revenue has consistently contracted. Management guides for an overall decline of approximately 4% for the full fiscal year 2027.
Deteriorating operating efficiency and declining gross margins compound this outlook.
DXC reported a 5% year-over-year increase in bookings for the first quarter of fiscal 2027. However, its two largest segments continue to see revenues fall.
Analysts maintain a cautious consensus on the stock. This reflects uncertainty about when DXC's turnaround efforts will translate into stable revenue growth.