Assessing Valuation After New AI Workforce and Cloud Transformation Forecasts

Gartner (NYSE:IT) has sparked conversation across enterprise circles after releasing new forecasts about artificial intelligence’s sweeping impact on the workforce. The company’s latest research is drawing interest for its clear look at how AI could reshape job roles, IT work, and digital infrastructure strategies.

See our latest analysis for Gartner.

This wave of AI research comes on the heels of a busy period for Gartner, with the company recently announcing an $800 million senior notes offering and updating its full-year revenue outlook upward. In the past year, however, Gartner’s share price return has slumped by 52.2%, and the total shareholder return sits even lower at -55.8%. This underscores fading momentum despite strategic moves and robust thought leadership. Long-term holders have still enjoyed a positive 51.4% total return over five years, but recent performance highlights the increased uncertainty and risk perception reflected in the company’s valuation.

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With a year of falling returns but a solid history and signs of healthy growth, the question now is whether Gartner’s recent setbacks are masking an undervalued opportunity or if the market has already taken its future prospects into account.

Compared to Gartner’s last close price of $231.03, the most popular narrative’s fair value estimate of $285.45 reflects a significant gap. This discrepancy highlights what analysts believe are the drivers behind Gartner’s true worth.

*The rapid increase in enterprise adoption of AI, digital transformation, cybersecurity, and complex IT strategies is driving rising client demand for Gartner’s proprietary insights across multiple functions and industries. This supports potential long-term revenue acceleration as enterprises seek trusted guidance for mission-critical initiatives.*

Read the complete narrative.

Want to know what’s powering this bold upside? The market’s current view does not account for a future shaped by transformative digital investments and a strategic change in Gartner’s client relationships. The real engine behind the narrative valuation relies on shifting earnings, margins, and sharp revenue expectations. Which forecasted trend tips the scale? Crack open the full story to see the hidden math that justifies this fair value call.

Result: Fair Value of $285.45 (UNDERVALUED)

Have a read of the narrative in full and understand what’s behind the forecasts.

However, ongoing cost-cutting by clients and the rapid rise of open-source AI tools could put pressure on Gartner’s recurring revenues and present challenges to the long-term upside case.

Find out about the key risks to this Gartner narrative.

Feel like a different story is unfolding, or want to examine the numbers on your own terms? You can dive in and craft your own view in just a few minutes: Do it your way

A great starting point for your Gartner research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.

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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.

Companies discussed in this article include IT.

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