Capgemini shares rise on strong earnings outlook

Capgemini SE shares climbed on Tuesday after the French IT services company raised its full-year revenue and margin guidance, citing strong demand for cloud and AI-related services.

The Paris-based firm now expects organic revenue growth of 6% to 7% for 2024, up from a prior forecast of 4% to 5%, while adjusted operating margin is projected to expand by 50 to 70 basis points, compared with the previous guidance of 30 to 50 basis points. The updated outlook follows a first-half performance that exceeded expectations, with revenue rising 7.4% year-on-year on an organic basis.

Capgemini’s shares were up 3.2% in early trading, outperforming broader European tech stocks, which remained under pressure amid concerns over global growth and elevated interest rates. The company’s order book grew by 10% in the first half, driven by demand in North America and Europe, particularly in sectors such as financial services, healthcare, and technology.

Analysts at Jefferies noted that the guidance upgrade reflects Capgemini’s ability to pass through higher costs to clients while maintaining strong pricing power in its core markets. The firm’s exposure to high-growth areas such as generative AI and cloud migration continues to support its revenue trajectory.

Capgemini’s stock has gained 12% year-to-date, outpacing the Euro Stoxx Technology Index, which has declined 5% over the same period. The company is scheduled to report its second-quarter earnings on July 25.