EPAM Stock: Between AI Growth and Global Risk Is Now the Time to Buy?
In an era of rapid digital transformation, demand for AI and cloud consulting services continues to rise. One company standing out in this space is EPAM Systems (NYSE: EPAM). Known globally for its IT consulting and custom software development, EPAM is helping enterprise clients embrace technologies like AI, cloud, and big data.
But despite strong fundamentals, the stock has been under pressure. So, what's really going on?
Solid Earnings, Strong AI Momentum
As of Q1 2025, EPAM reported impressive financial results, with revenue growing over 11% year-over-year and adjusted EPS beating analyst expectations. The company also raised its full-year guidance — a signal of management’s confidence.
A key driver of this optimism is the launch of DIAL 3.0, EPAM’s proprietary AI platform. Through ongoing partnerships with AWS and Google Cloud, the company is well-positioned to ride the wave of generative AI adoption globally.
So Why Is the Stock Underperforming?
Despite the earnings beat and AI expansion, EPAM’s stock has dropped more than 38% over the past year. There are a few key reasons behind this:
1. Geopolitical Risk
EPAM had to fully exit its Russian operations following the Ukraine war, leading to a costly restructuring. With continued instability in Europe, some investors remain cautious.
2. Global Economic Concerns
New U.S. tariffs, rising interest rates, and recession fears are all factors that may lead global enterprises to reduce IT budgets — impacting project-based companies like EPAM.
3. Leadership Transition
Founding CEO Arkadiy Dobkin is stepping down in September 2025. While succession plans are in place, a leadership change always introduces uncertainty about future strategy.
Is EPAM a Buy Right Now?
Given the recent correction, EPAM may represent a compelling long-term opportunity. The stock appears undervalued when considering its future growth potential in AI, cloud, and enterprise digital transformation.
Instead of trying to time the bottom, a dollar-cost averaging approach may be wise. Investors should monitor key technical levels and keep an eye on upcoming earnings reports and macroeconomic indicators.
Final Thoughts: Risk-Adjusted Growth Potential
EPAM sits at the crossroads of short-term uncertainty and long-term opportunity. While geopolitical risks and economic headwinds may weigh on performance in the near term, the company’s positioning in the AI ecosystem is strong.
As enterprises increase spending on generative AI, automation, and digital agility, EPAM is likely to benefit. For investors with a long-term view, this may be the kind of undervalued growth stock worth watching — or even accumulating.
Disclaimer: This content is for informational purposes only and does not constitute investment advice. Always do your own research before making financial decisions.
