TEANECK, N.J. - Cognizant Technology Solutions Corp (BVMF:CTSH34). (NASDAQ: CTSH), a prominent IT services provider with a market capitalization of $39.7 billion and annual revenue of $19.4 billion, has become the first global IT services company to be granted the ISO/IEC 42001:2023 certification for its artificial intelligence management system, a standard that promotes the responsible development and deployment of AI technologies. The certification, announced today, was accredited by DNV, a global leader in management systems certification and training. According to InvestingPro data, Cognizant maintains a strong financial health score of "GOOD," positioning it well for this strategic initiative.
The ISO/IEC 42001:2023 certification provides a framework for organizations to manage AI risks and opportunities responsibly throughout the AI system lifecycle. "Receiving the first ISO/IEC 42001:2023 accredited certification in our industry is an honor," said Ravi Kumar S, CEO of Cognizant. "This certification solidifies our role as a trusted leader in enabling ethical and sustainable digital transformation worldwide."
Barbara Frencia, CEO of Business Assurance at DNV, remarked on the certification as a milestone that signifies Cognizant's commitment to a safe, reliable, and ethical approach to AI, which can build trust internally and externally. The certification process validated Cognizant's AI framework and highlighted the commitment of Cognizant's associates to meet the stringent requirements of the standard, according to Alexis Samuel, Senior Vice President and Head of Global Delivery Excellence at Cognizant.
Amir Banifatemi, Chief Responsible AI Officer at Cognizant, emphasized the importance of trustworthiness, accountability, and societal impact in AI development. "For AI to truly deliver value, it must be designed and deployed with these elements at its core," he said.
The certification encompasses aspects such as responsible AI development, risk and opportunity management, fairness, transparency, security, and reliability, with adaptability to technological advances and alignment with sustainable goals. Cognizant's approach to achieving this certification involved engaging teams across various departments to embed responsible AI principles into the company's operations.
This recognition comes at a time when, according to a study by Cognizant and Oxford Economics, 76% of businesses plan to leverage AI to create new revenue streams, indicating a surge in the demand for AI and the need for robust governance frameworks. With its stock trading near its 52-week high and maintaining a healthy current ratio of 2.23, Cognizant appears well-positioned to capitalize on this growing market demand. InvestingPro analysis suggests the stock may be undervalued, with additional insights available in the comprehensive Pro Research Report, which provides deep-dive analysis of this and 1,400+ other US stocks.
The information in this article is based on a press release statement from Cognizant.
In other recent news, Cognizant Technology Solutions (NASDAQ:CTSH) reported a robust third-quarter performance with revenues hitting the $5 billion mark, a 2.7% year-over-year increase. This development was attributed to successful investments in artificial intelligence (AI), integration of recent acquisitions, and effective talent retention strategies. Furthermore, the company's adjusted operating margins improved to 15.3%, and earnings per share (EPS) grew by about 5% year-to-date.
TD Cowen has adjusted its outlook on Cognizant, raising the company's price target to $76 from $75 while maintaining a Hold rating on the stock. This revision reflects a positive assessment of Cognizant's third-quarter performance, underscored by its Healthcare and Financial Services sectors, improved execution, and an uptick in Annual Contract Value (ACV).
Despite these positive aspects, TD Cowen highlighted areas of mixed outcomes. The company's year-over-year bookings remained flat, and there was a slight decline when looking at the trailing twelve months, with a 2% decrease. Additionally, the firm's forecast for organic growth in the fourth quarter was characterized as light.
The analyst from TD Cowen suggested that the overall picture might be interpreted as more favorable than some investors had feared, given the challenges the company faces. However, the firm also indicated that growth estimates for the calendar year 2025 are likely to be moderated. These recent developments underscore a nuanced view of Cognizant's current position and near-term prospects.
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