Globant (NYSE:GLOB) has put AI at the center of its story, with fresh multi-year alliances with Vercel and Anthropic PBC aimed at scaling agentic AI services and modern web deployments for global enterprises.

These AI alliances are landing at a time when Globant's share price has come under pressure, with the stock down 20.09% over 30 days and 52.50% year to date, while the 1 year total shareholder return has declined 64.23%, signalling fading momentum despite the business push into agentic AI.

If this AI story has your attention, it can be useful to see what else is happening in the sector, starting with a focused list of 63 profitable AI stocks that aren't just burning cash.

After a share price slide of more than 50% year to date, Globant's AI push sits against a very different market backdrop. The next step is clear: does the current valuation still offer a compelling risk reward for new buyers?

Most Popular Narrative: 51.1% Undervalued

Globant's most followed narrative pegs fair value at $61.23, which sits well above the last close of $29.96 and frames a wide valuation gap for investors to assess.

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 described as driving higher earnings visibility, enhanced client stickiness, and structurally improved net margins as AI process automation scales.

Curious what underpins that fair value gap for Globant? The narrative leans heavily on steady revenue compounding, improving profitability and a richer earnings multiple in a few years. The key is how those moving parts interact.

The narrative uses a 9.42% discount rate and ties its fair value to expectations for earnings, revenue and margins that are set out explicitly in analyst models. It also assumes a future P/E multiple that is below the current industry level, which is an important nuance if you are comparing Globant to other IT services stocks on valuation alone.

Result: Fair Value of $61.23 (UNDERVALUED)

However, Globant's subdued revenue growth and early stage AI Pod adoption mean that slower client spending or weaker demand for new models could quickly challenge that undervalued thesis.

Next Steps

With mixed sentiment around Globant's AI push, this is a moment to move quickly and test the story against the numbers yourself. To weigh both the upside potential and the issues investors are worried about, start with the 3 key rewards and 1 important warning sign.

Looking for more investment ideas beyond Globant?

If Globant's story has sharpened your thinking, do not stop here. Put that momentum to work by scanning other opportunities that might better fit your goals.

• Zero in on quality at a discount by reviewing companies highlighted in the 45 high quality undervalued stocks.
• Strengthen your income stream by checking stocks picked out in the 9 dividend fortresses.
• Prioritise resilience by assessing companies surfaced in the 79 resilient stocks with low risk scores.

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.