Globant (NYSE:GLOB) just announced a multi year alliance with Anthropic PBC, focused on deploying Claude powered AI Pods across its client base, a move that directly highlights the stock’s AI services positioning.

Globant's share price has picked up in the very short term, with a 1 day share price return of 3.57% and 7 day return of 8.26%. However, this follows a much weaker patch, including a 30 day share price return down 15.12% and year to date share price return down 48.45%, while the 1 year total shareholder return is down 64.56%. This indicates that recent news and index changes are coming against a backdrop of fading momentum over several years.

If Globant's AI alliance has caught your eye and you want to see what else is out there in this space, it could be worth checking out the 29 AI small caps.

With Globant now trading at US$32.51 and showing an intrinsic discount estimate of 69%, the key question is whether recent AI news and index moves signal mispricing, or whether the market is already factoring in future growth.

Most Popular Narrative: 47% Undervalued

Globant's most followed narrative pegs fair value at around $61.23, almost double the last close of $32.51, which puts a clear spotlight on the gap between market price and that valuation story.

The transition to outcome-based, subscription pricing models, enabled by Globant's AI pods and proprietary platforms, shifts the revenue mix toward higher-margin, recurring services. Early traction with this model (18 clients signed, significant portion of pipeline growth) is set to drive higher earnings visibility, enhanced client stickiness, and structurally improved net margins as AI process automation scales.

Curious what sits behind that fair value for Globant? The narrative leans heavily on compounding revenue, a step up in margins, and a future earnings multiple that has to do some heavy lifting. The real twist is how buybacks and model assumptions interact to arrive at that number. The full breakdown joins those pieces together.

Result: Fair Value of $61.23 (UNDERVALUED)

However, Globant's subdued recent revenue growth and the early stage of AI Pod adoption, with only 18 clients so far, could still undermine that undervalued narrative if progress disappoints.

Next Steps

Given the mix of optimism around Globant's AI story and clear concerns in the recent share price performance, it makes sense to pressure test the full picture yourself and weigh both sides carefully with the 3 key rewards and 1 important warning sign.

Looking for more ideas beyond Globant?

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.