Published on 27 Dec 2023 on Zacks via Yahoo Finance
Infosys Limited INFY shares fell 1.7% on Tuesday after the company disclosed in a Securities And Exchange Commission filing that an unnamed global customer terminated an artificial intelligence (AI) contract worth $1.5 billion. However, the India-based IT consulting and outsourcing company didn’t disclose the reasons behind this termination.
Infosys secured the contract in September 2023, which had a deal period of 15 years. Under this contract, INFY was supposed to provide an array of upgraded digital experiences and operational services based on its platforms and AI solutions.
The deal termination comes at a time when Infosys is facing a mixed bag of challenges. Its business is being affected by near-term uncertainties stemming from inflation and higher interest rates. Slow decision-making processes, along with softness in digital transformation programs and discretionary spending in the current uncertain macroeconomic environment, are hurting this Zacks Rank #4 (Sell) company’s volumes.