• Tech stocks declined in August as investors questioned the limits to growth of AI companies. Nvidia, Marvell Technology, and Super Micro Computer Inc all underperformed the broader market in August. This uncertainty may impact the S&P 500, which is dominated by the “Magnificent 7” tech giants.

The Nasdaq 100 closed down 1.22% on Friday and while U.S. markets are closed today for the Labor Day holiday, futures contracts for the index are not: They’re trading flat this morning, implying that investors are not expecting much from tech stocks once the opening bell rings in New York on Tuesday.

• Cognizant recently announced a partnership with Workfabric AI to deploy 1,000 context engineers over the next year, aiming to industrialize agentic AI solutions for enterprises using Workfabric’s ContextFabric™ platform.
• This move highlights Cognizant’s commitment to context engineering, an emerging field focused on transforming organizational knowledge into actionable AI-driven outcomes, with emphasis on accuracy, privacy, and scalable adoption.
• We’ll explore how Cognizant’s focus on deploying context engineers could reshape its investment narrative and strengthen its position in enterprise AI services.

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Cognizant Technology Solutions Investment Narrative Recap

To own Cognizant, you need to believe the company can successfully transition from traditional IT services to higher-value AI-driven offerings, capturing new demand while fending off stronger competition. The announcement of deploying 1,000 context engineers with Workfabric AI could strengthen Cognizant’s short-term momentum in enterprise AI, but the most significant near-term catalyst remains the conversion of early AI projects into recurring, large-scale contracts; competition from both established tech players and new entrants continues to be the top risk. Given these factors, the immediate impact of the news is positive but not transformative for the company’s biggest risk profile.

One of the most relevant recent announcements is the launch of Cognizant Agent Foundry, a platform designed to develop and orchestrate autonomous AI agents. This aligns closely with the context engineer initiative and directly supports Cognizant’s goal to expand its enterprise AI project pipeline and multi-year deal wins, key to capturing new revenue streams and margin opportunities as clients move to broader AI adoption.

But while Cognizant’s investments in AI are accelerating, the growing threat of direct competition from technology vendors in consulting is a risk investors should keep in mind, especially as…

Read the full narrative on Cognizant Technology Solutions (it’s free!)

Cognizant Technology Solutions is projected to achieve $23.4 billion in revenue and $3.0 billion in earnings by 2028. This outlook assumes a 4.6% annual revenue growth rate and a $0.6 billion increase in earnings from the current $2.4 billion level.

Uncover how Cognizant Technology Solutions’ forecasts yield a $86.63 fair value, a 20% upside to its current price.

Exploring Other Perspectives

Estimates from four members of the Simply Wall St Community put Cognizant’s fair value between US$70.42 and US$97.87. While investor views differ, many see client adoption of new AI services as a crucial factor for long-term success, offering several viewpoints that you might want to consider.

Explore 4 other fair value estimates on Cognizant Technology Solutions – why the stock might be worth just $70.42!

Build Your Own Cognizant Technology Solutions Narrative

Disagree with existing narratives? Create your own in under 3 minutes – extraordinary investment returns rarely come from following the herd.

• A great starting point for your Cognizant Technology Solutions research is our analysis highlighting 4 key rewards that could impact your investment decision.
• Our free Cognizant Technology Solutions research report provides a comprehensive fundamental analysis summarized in a single visual – the Snowflake – making it easy to evaluate Cognizant Technology Solutions’ overall financial health at a glance.

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As artificial intelligence replaces entry-level jobs, California’s universities and community colleges are offering a glimmer of hope for students: free AI training that will help them master the new technology.

“You’re seeing in certain coding spaces significant declines in hiring for obvious reasons,” Gov. Gavin Newsom said in early August from the seventh floor of Google’s San Francisco office.

Flanked by leadership from California’s higher education systems, he called attention to the recent layoffs at Microsoft, Google’s parent company, Alphabet, and at nearby Salesforce Tower, home to the tech company that is still the city’s largest private employer.

Now, some of those companies — including Google and Microsoft — will offer a suite of AI resources free to California schools and universities. In return, the companies could gain access to millions of new users.

The state’s community colleges and California State University campuses are “the backbone of our workforce and economic development,” Newsom said, just before education leaders and tech executives signed agreements on AI.

The new deals are the latest developments in a frenzy that began in November 2022, when OpenAI publicly released the free artificial intelligence tool ChatGPT, forcing schools to adapt.

San Diego Unified teachers started using AI software that suggested what grades to give students, CalMatters reported. Some of the district’s board members were unaware that the district had purchased the software.

Last month, the company that oversees Canvas, a learning management system popular in California schools and universities, said it would add “interactive conversations in a ChatGPT-like environment” into its software.

To combat potential AI-related cheating, many K-12 and college districts are using a new feature from the software company Turnitin to detect plagiarism, but a CalMatters investigation found that the software accused students who did real work instead.

These deals are sending mixed signals, said Stephanie Goldman, the executive director of the Faculty Assn. of California Community Colleges. “Districts were already spending lots of money on AI detection software. What do you do when it’s built into the software they’re using?”

Don Daves-Rougeaux, a senior advisor for the community college system, acknowledged the potential contradiction but said it’s part of a broader effort to keep up with the rapid pace of changes in AI. He said the community college system will frequently reevaluate the use of Turnitin along with all other AI tools.

California’s community college system is responsible for the bulk of job training in the state but receives the least funding from the state per student.

“Oftentimes when we are having these conversations, we are looked at as a smaller system,” Daves-Rougeaux said. The state’s 116 community colleges collectively educate roughly 2.1 million students.

As part of the recent deals, the community college system will partner with Google, Microsoft, Adobe and IBM to roll out additional AI training for teachers. Daves-Rougeaux said the system also has signed deals that will allow students to use exclusive versions of Google’s counterpart to ChatGPT, Gemini, and Google’s AI research tool, Notebook LLM.

Daves-Rougeaux said that collectively these tools are worth “hundreds of millions of dollars,” though he could not provide an exact figure.

“It’s a tough situation for faculty,” Goldman said. “AI is super important but it has come up time and time again: How do you use AI in the classroom while still ensuring that students, who are still developing critical thinking skills, aren’t just using it as a crutch?”

One concern is that faculty could lose control over how AI is used in their classrooms, she added.

The K-12 system and CSU system are forming their own tech deals. Amy Bentley-Smith, a spokesperson for the CSU system, said it is working on its own AI programs with Google, Microsoft, Adobe and IBM as well as Amazon Web Services, Intel, LinkedIn, OpenAI and others.

Angela Musallam, a spokesperson for the state government operations agency, said California high schools are part of the deal with Adobe, which aims to promote “AI literacy,” the idea that students and teachers should have basic skills to detect and use AI.

Much like the community college system, which is governed by local districts, Musallam said individual K-12 districts would need to approve any deal.

Will deals make a difference to students, teachers?

Experts say it’s too early to tell how effective AI training will be.

Justin Reich, an associate professor at MIT, said a similar frenzy took place 20 years ago when teachers tried to teach computer literacy. “We do not know what AI literacy is, how to use it, and how to teach with it. And we probably won’t for many years,” Reich said.

The state’s new deals with Google, Microsoft, Adobe and IBM allow these tech companies to recruit new users — a benefit for the companies — but the actual lessons aren’t time-tested, he said.

“Tech companies say: ‘These tools can save teachers time,’ but the track record is really bad,” Reich said. “You cannot ask schools to do more right now. They are maxed out.”

Erin Mote, the chief executive of an education nonprofit called InnovateEDU, said she agrees that state and education leaders need to ask crucial questions about the efficacy of the tools that tech companies offer but that schools still have an imperative to act.

“There are a lot of rungs on the career ladder that are disappearing,” she said. “The biggest mistake we could make as educators is to wait and pause.”

Last year, the California Community Colleges Chancellor’s Office signed an agreement with Nvidia, a technology infrastructure company, to offer AI training similar to the kinds of lessons Google, Microsoft, Adobe and IBM will deliver.

Melissa Villarin, a spokesperson for the chancellor’s office, said the state won’t share data about how the Nvidia program is going because the cohort of teachers involved is still too small.

Echelman writes for CalMatters, where this article originally appeared.