Owner and CEO, GR20 Research

Gregory Ramirez

Owner and CEO

Industry Research and Consulting Services

GR20 Research

GR20 Research provides industry research and consulting services

Equity Bottom-Up

<ul>
<li>Capgemini delivered slightly better-than-expected FY25 results, with revenues ahead of guidance, stable margins and FCF in line with targets. FY26 guidance matches consensus, with margin expansion supported by WNS synergies.   </li>
<li>A CMD in May should provide long-awaited clarity on the next strategic plan. Priorities are AI-led growth acceleration, AI-enhanced intelligent operations and sovereignty, where Capgemini differentiates itself from global peers.   </li>
<li>Contrary to concerns agentic AI tools could disrupt IT services, Capgemini’s role as a large-scale systems integrator and orchestrator of complex enterprise AI deployments positions it as a structural beneficiary. </li>
</ul>


Capgemini delivered slightly better-than-expected FY25 results, with revenues ahead of guidance, stable margins and FCF in line with targets. FY26 guidance matches consensus, with margin expansion supported by WNS synergies.   
A CMD in May should provide long-awaited clarity on the next strategic plan. Priorities are AI-led growth acceleration, AI-enhanced intelligent operations and sovereignty, where Capgemini differentiates itself from global peers.   
Contrary to concerns agentic AI tools could disrupt IT services, Capgemini’s role as a large-scale systems integrator and orchestrator of complex enterprise AI deployments positions it as a structural beneficiary. 


Capgemini (CAP FP): Confirming that AI Is a Catalyst

<ul>
<li>Capgemini has announced the sale of Capgemini Government Solutions (CGS), following media and political scrutiny over a contract with ICE. The emergency decision addresses legal restrictions and resolves the controversy.   </li>
<li>The disposal of CGS is unlikely to materially affect financials. A broad pool of potential acquirers exists (competitors, PE, or management), with timing and price likely to determine the buyer.   </li>
<li>With the CGS issue resolved, investor focus will shift to challenges from agentic AI and opportunities such as the WNS acquisition, which could enhance AI-driven IT and business process services. </li>
</ul>


Capgemini has announced the sale of Capgemini Government Solutions (CGS), following media and political scrutiny over a contract with ICE. The emergency decision addresses legal restrictions and resolves the controversy.   
The disposal of CGS is unlikely to materially affect financials. A broad pool of potential acquirers exists (competitors, PE, or management), with timing and price likely to determine the buyer.   
With the CGS issue resolved, investor focus will shift to challenges from agentic AI and opportunities such as the WNS acquisition, which could enhance AI-driven IT and business process services. 


Thematic (Sector/Industry)

<ul>
<li>Microsoft's Frontier Company accelerates enterprise AI deployment rather than competing with IT services firms, reflecting a broader industry shift towards execution and production-scale AI adoption.</li>
<li>We expect Microsoft, OpenAI, Anthropic and AWS to expand—not displace—the IT services market, reinforcing demand for systems integrators and enterprise transformation partners.</li>
<li>We remain positive on European IT services. Current valuations underestimate the medium-term growth opportunity from enterprise AI adoption.</li>
</ul>


Microsoft's Frontier Company accelerates enterprise AI deployment rather than competing with IT services firms, reflecting a broader industry shift towards execution and production-scale AI adoption.
We expect Microsoft, OpenAI, Anthropic and AWS to expand—not displace—the IT services market, reinforcing demand for systems integrators and enterprise transformation partners.
We remain positive on European IT services. Current valuations underestimate the medium-term growth opportunity from enterprise AI adoption.


European IT Services: Microsoft, OpenAI, Anthropic and AWS Are Not Competitors

<ul>
<li>The US has imposed a USD 100,000 fee on H-1B visa applications, aiming to prioritise high-skilled, high-wage applicants. The measure is expected to shift offshore firms further toward local hiring.   </li>
<li>Capgemini and Atos, the only European firms with H-1B activity, are less reliant on US-based visas. Limited exposure means the new fee would have only a modest impact on costs.   </li>
<li>While visa-related changes pose limited risk to European players, greater disruption could come from the rise of agentic AI and the uncertain trajectory of anti-outsourcing legislation like the HIRE Act.</li>
</ul>


The US has imposed a USD 100,000 fee on H-1B visa applications, aiming to prioritise high-skilled, high-wage applicants. The measure is expected to shift offshore firms further toward local hiring.   
Capgemini and Atos, the only European firms with H-1B activity, are less reliant on US-based visas. Limited exposure means the new fee would have only a modest impact on costs.   
While visa-related changes pose limited risk to European players, greater disruption could come from the rise of agentic AI and the uncertain trajectory of anti-outsourcing legislation like the HIRE Act.


European IT Services: H-1B Concerns Are Overstated

<ul>
<li>The European IT services sector remained flat in Q2 2025, with limited growth momentum. While deterioration has stabilised, recovery remains stalled due to geopolitical uncertainty, tariffs, and cautious client spending.   </li>
<li>US and Indian IT firms are showing stronger performance, particularly in BFSI, while European firms keep underperforming due to heavier exposure to struggling sectors and geographies.    </li>
<li>Capgemini’s acquisition of WNS signals renewed appetite for transformative deals, targeting the AI-driven evolution of the BPO market. Other transactions include KKR's acquisition of Datagroup and WSP’s acquisition of Ricardo.</li>
</ul>


The European IT services sector remained flat in Q2 2025, with limited growth momentum. While deterioration has stabilised, recovery remains stalled due to geopolitical uncertainty, tariffs, and cautious client spending.   
US and Indian IT firms are showing stronger performance, particularly in BFSI, while European firms keep underperforming due to heavier exposure to struggling sectors and geographies.    
Capgemini’s acquisition of WNS signals renewed appetite for transformative deals, targeting the AI-driven evolution of the BPO market. Other transactions include KKR's acquisition of Datagroup and WSP’s acquisition of Ricardo.


European IT Services: Q2 2025 Takeaways – Stabilisation Without Rebound

France

Capgemini offers information technology services. The Company provides mobile software solutions, business process management, outsourcing, cloud computing, finance, consulting, supply chain management, engineering, and other services. Capgemini serves aerospace, defense, automotive, health care, life science, telecom, media, and entertainment industries worldwide.

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Capgemini (CAP FP)

Capgemini (CAP FP): Confirming that AI Is a Catalyst

Capgemini's FY25 results exceed expectations, with focus on AI-led growth and positioning as a structural beneficiary in the IT services industry....

Gregory Ramirez

Capgemini (CAP FP): Exiting US Federal

Capgemini sells CGS amid ICE contract controversy, unlikely to impact finances. Investor attention now on AI challenges and WNS acquisition...

Gregory Ramirez

European IT Services: Microsoft, OpenAI, Anthropic and AWS Are Not Competitors

Microsoft's Frontier Company accelerates enterprise AI deployment, signaling a shift towards production-scale adoption and reinforcing demand for...

Gregory Ramirez

European IT Services: H-1B Concerns Are Overstated

US imposes $100,000 fee on H-1B visas to prioritize high-wage applicants, shifting offshore firms towards local hiring. European firms like...

Gregory Ramirez

European IT Services: Q2 2025 Takeaways – Stabilisation Without Rebound

European IT services sector stagnant in Q2 2025, US and Indian firms outperforming. Capgemini's acquisition of WNS signals shift towards AI-driven...

Gregory Ramirez

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Capgemini (CAP FP): Confirming that AI Is a Catalyst

​Capgemini's FY25 results exceed expectations, with focus on AI-led growth and positioning as a structural beneficiary in the IT services industry....

Gregory Ramirez

Capgemini (CAP FP): Exiting US Federal

​Capgemini sells CGS amid ICE contract controversy, unlikely to impact finances. Investor attention now on AI challenges and WNS acquisition...

Gregory Ramirez

European IT Services: Microsoft, OpenAI, Anthropic and AWS Are Not Competitors

​Microsoft's Frontier Company accelerates enterprise AI deployment, signaling a shift towards production-scale adoption and reinforcing demand for...

Gregory Ramirez

European IT Services: H-1B Concerns Are Overstated

​US imposes $100,000 fee on H-1B visas to prioritize high-wage applicants, shifting offshore firms towards local hiring. European firms like...

Gregory Ramirez

European IT Services: Q2 2025 Takeaways – Stabilisation Without Rebound

​European IT services sector stagnant in Q2 2025, US and Indian firms outperforming. Capgemini's acquisition of WNS signals shift towards AI-driven...

Gregory Ramirez

Capgemini's FY25 results exceed expectations, with focus on AI-led growth and positioning as a structural beneficiary in the IT services industry....

Capgemini sells CGS amid ICE contract controversy, unlikely to impact finances. Investor attention now on AI challenges and WNS acquisition...

Microsoft's Frontier Company accelerates enterprise AI deployment, signaling a shift towards production-scale adoption and reinforcing demand for...

US imposes $100,000 fee on H-1B visas to prioritize high-wage applicants, shifting offshore firms towards local hiring. European firms like...

European IT services sector stagnant in Q2 2025, US and Indian firms outperforming. Capgemini's acquisition of WNS signals shift towards AI-driven...