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India's central bank raised its key interest rate to 5.5 percent on Wednesday, the first hike in over three years. The move is meant to fight inflation fueled by high energy prices and a weaker local currency.
This matters because the company recently formed a major alliance to build out India's digital backbone. Higher rates make it more expensive for partners to fund large infrastructure projects, which could slow the pace of work or eat into the profits of these long-term builds.
Source: WSJ
Barclays lowered its price target from $426 to $378 while keeping its overweight rating, which is a recommendation to own more of the stock than average. JP Morgan and Argus Research also kept their buy-equivalent ratings following the recent earnings report. While the lower target from Barclays reflects a more cautious view on the stock's near-term price, the average analyst target remains high at $435. This suggests Wall Street still sees significant room for the stock to rise from its current price of about $305.
The company reported fourth-quarter earnings of $4.40 per share, beating the $4.07 analysts expected. Revenue reached $10.6 billion, also topping estimates. For the full year, revenue grew 21 percent as the company successfully pivoted away from low-margin consumer electronics toward building complex AI infrastructure for cloud providers.
Management gave a strong outlook for 2027, expecting demand for AI data centers to keep driving growth. The company is also becoming more efficient, with operating margins, the profit left after paying for the costs of running the business, expanding by 0.4 percent. This shift toward high-end engineering makes the business more profitable and harder for rivals to compete with.
See the full quarter, and how our tracked metrics did
Source: 8-K filing
Management has beaten its own profit targets for eight straight quarters. This perfect run shows they have a firm grip on their costs even as the business grows rapidly.
| Expectation | |
|---|---|
| EPS | $4.05 |
| Revenue | $11.01B |