In the current financial landscape, where technology and finance are intertwined more than ever, Goldman Sachs emerges as an influential analyst in its sectorThe firm's recent findings provide insightful predictions about the upcoming 2024 fourth-quarter earnings reports from the IT services sector, alongside anticipated developments for 2025. The expectations put forth by Goldman Sachs suggest a gradual improvement in the overall market demand for IT services, indicating a turn from the earlier struggles faced by the industryBy examining statements made by corporate management during quarterly earnings calls and analyzing results disclosed by prominent firms such as Accenture, Goldman Sachs has deduced that there will be a moderate growth in the IT services market during the last quarter of 2024. Such predictions are not without careful scrutiny, as they stem from diligent monitoring of industry trends

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Insights from senior executives typically provide critical context regarding internal perceptions of market demand, aiding in evaluating the trajectory of business growthAccenture's robust performance serves as a bellwether, reflecting broader trends within the IT services ecosystem

Moreover, the established guidance for 2025 is indicative of an accelerating revenue growth trend, driven by a gradual enhancement in client demand dynamicsWhile the fundamentals of the IT services market may seem to have bottomed out, it's worth noting that recent weeks have witnessed a deterioration in investor sentiment, primarily due to adverse conditions in the foreign exchange landscape, imposing psychological pressures on market playersNonetheless, Goldman Sachs has noted that the cyclical headwinds are expected to moderate, leading to a pivotal shift in investment preferences, leaning more toward application-centric companies.

Goldman Sachs does not shy away from making specific investment recommendations in light of these findings

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One prominent case is IBM, which has attained a "buy" rating from the investment bank for 2025. Goldman Sachs posits that IBM will witness a sustained acceleration in its software growthAnalyzing historical data reveals an upward trajectory with respect to IBM's software revenue, positioning the company well for future endeavorsIn relation to forecasts for the fourth quarter, Goldman Sachs aligns closely with Wall Street's expectationsLooking ahead, it anticipates that IBM’s business guidance for 2025 will showcase the strong performances of Red Hat, particularly highlighted by substantial revenue from the upcoming mid-year mainframe update.

For investors wagering on the relevance of software growth in their portfolios, these developments become vital indicatorsIn addition, the evolving nature of IBM’s consulting business will undergo intense scrutiny, as stakeholders evaluate the firm's capability to gain additional market share amid fierce competition

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Goldman Sachs expresses confidence that IBM is well-equipped not only to enhance its market presence but also to propel the growth of its software portfolio into the mid-to-high single-digit percentagesFurthermore, February 4th's Investor Day is viewed as a crucial catalyst for potential stock price appreciation, creating an anticipation of substantial market expansion.

Shifting focus to other prospective entities in the IT space, Globant has also been awarded a "buy" rating by Goldman SachsThanks to the bank's thorough understanding of industry dynamics, it foresees a stable growth trajectory for Globant, particularly into 2025, where its profit margins are expected to expand solidlyReflecting on its performance in the fourth quarter of 2024, Globant is projected to meet market expectations, showcasing its operational stabilityAs 2025 approaches, it is anticipated that Globant’s guidance will illustrate accelerating revenue growth along with a steady rise in profit margins

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This surge can be attributed to the company's strategic positioning within high-growth verticals, allowing it to leverage advantages amidst a recovering cyclical market.

Investors keeping a keen eye on Globant are particularly focused on the company's trends regarding revenue growth, as it serves as a metric to gauge the rate of potential revenue resurgence in 2025 and inform their investment strategies.

Another player benefiting from Goldman Sachs’ analyses is EPAM, which has received a "buy" ratingThis endorsement serves as a strong affirmation of EPAM's capabilitiesThrough extensive market research and industry evaluations, Goldman Sachs anticipates that EPAM’s outlook for 2025 will reveal a trend of moderate organic growthIts imminent business guidance is expected to clearly represent a stability-to-improvement trajectory regarding discretionary spending trends