The 2025 stock market has not been kind to Globant. The share price of the Argentine software development group, whose clients include Walt Disney, Santander and Nissan, has more than halved since February.
The drop followed the company’s report of slowing growth, which unsettled investors already nervous about tech stocks.
The decline then steepened as tariff threats from the Trump administration sparked a wider market rout. The tech-heavy Nasdaq100 for example has shed more than 10 per cent this year.
“The reaction was absolutely exaggerated,” says chief executive Martín Migoya, who started Globant with three friends in a bar in Buenos Aires in 2003. “It’s not something that we were expecting at all.”
Despite the sell-off, Globant retains a market capitalisation of nearly $5bn. The tech group’s growth slowdown comes more than a decade after it became the region’s first software company to sell shares on the New York Stock Exchange.
That initial public listing sparked a meteoric rise for the group and pushed it to unicorn status in 2015 when its market value topped $1bn.
The company reported in its February earnings statement that revenues had risen 15.3 per cent in 2024. However, it projected a less than 12 per cent increase for this year.
That compares with an average compound growth rate of 37.1 per cent between 2020 and 2023, a clip that put Globant among the Americas’ fastest-growing companies.
Migoya says Globant’s business “is getting better every year” as it evolves from being a software provider to a focus on helping its more than 1,000 clients in some 80 countries incorporate artificial intelligence into their businesses.
The scale of opportunity for Globant, Migoya says, is akin to Henry Ford’s implementation of the moving assembly line, which accelerated the car manufacturing process early in the 20th century.
“That’s the opportunity [of AI] for every process, in every company, in every industry,” he says. “Globant is ready. If market conditions improve, we can expect very big things.”
Analysts say budget constraints are forcing many companies to pull back investment in the tools that Globant offers, a vast mix that includes data analytics, digital marketing, robotics and blockchain services.
The company meanwhile faces stiff competition for contracts from rivals such as Accenture and EPAM Systems. Globant’s main operational office is in Buenos Aires while the group is officially headquartered in Luxembourg.
Migoya says he saw a “much softer” uptake in late 2024 from new customers in North America and Latin America, which together make up about 75 per cent of Globant’s earnings, but he believes that this was rooted in “overall conditions rather than specific technologies”.
Globant’s decade-long investment in AI-related projects is paying off since they contributed $350mn to its revenues last year, more than double the figure for 2023.
Malcolm Dorson, head of emerging markets strategy at Global X ETFs, which scooped up shares in Globant when the stock price fell, says the sell-off “looked like an overreaction to prudent earnings guidance”.
“A relatively conservative outlook plus broader tech weakness pushed the stock price out of sync with its solid fundamentals,” Dorson says.
“Globant has consistently delivered sustainable earnings helping blue-chip global companies elevate their tech and increase efficiencies,” he adds. “This trend isn’t going anywhere.”
For most companies, the AI revolution has yet to take hold. US Census Bureau research found that fewer than 7 per cent of American businesses with at least 250 employees were using the technology at a company-wide level last year.
“Right now AI is a personal productivity tool, just as the internet in the beginning was a simple tool for sending messages,” Migoya says. “But in the future, AI will be at the core of the business processes, with humans overseeing them. It’s about [getting] AI agents into the process, and getting the right supervision points for humans inside the process.”
Globant operates on a decentralised “studio” model. About 40 departments specialise in areas such as media, finance and healthcare, or on platforms including Salesforce and Google Cloud.
Staff who are hired from those industries help tech experts develop sector-specific tools.
The company has invested in sports services in recent years, partnering with Formula 1 to provide data tools aimed at boosting team performance and audience engagement. It has also sponsored Argentine F1 star Franco Colapinto.
In 2022, the company announced a multiyear partnership with Fifa, the international governing body for football.
Early examples of company-wide systems include AI agents to detect and fix bugs in software, or perform customer service roles.
Nearly a fifth of Globant’s more than 30,000 staff are based in Argentina, but the company generates only about 5 per cent of its revenue there, limiting exposure to the country’s long-running economic crisis and currency volatility that has hit the profits of some multinationals in recent years.
Argentina, however has lately become a bright spot amid global economic gloom, says Migoya.
Business leaders have praised libertarian president Javier Milei’s fiscal balance and deregulation reforms, which contrast with overspending by other regional governments.
Migoya is “convinced” that the government’s stated aim to turn Argentina into a “low-regulation AI hub” will offer competitive advantages, while he adds that Europe’s tough rules “may hurt” innovation. Questions remain about the regulatory approach in the US.
“The business environment in Argentina, after so many years of contraction, is having a boom,” he says.
Local companies are expanding investment, creating opportunities for Globant, he adds, citing a project incorporating AI into operations at state-controlled energy group YPF.
“Seeing Argentina as a positive exception rather than the opposite is very encouraging,” Migoya adds.
