Morgan Stanley analyst Toni Kaplan has maintained their neutral stance on IT stock, giving a Hold rating on September 8.
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Toni Kaplan’s rating is based on a combination of factors that highlight both the risks and strengths of Gartner’s business model in the face of evolving AI technologies. The expert consulted in the report acknowledges that while AI presents challenges, such as the potential reduction in seat licenses due to AI’s ability to handle routine tasks, Gartner’s core strength as a trusted information provider remains intact.
Despite the risks, certain areas of Gartner’s business, like events, contract optimization, and vendor research, are seen as resilient against AI disruptions. Additionally, high-level CIO seats are considered critical and less likely to be replaced by AI-generated content. The report also notes that while enterprise research could face risks, especially at the read-only subscription level, advisory level subscriptions show higher satisfaction, indicating a more secure position. This nuanced view of Gartner’s strengths and vulnerabilities informs the Hold rating, balancing potential AI threats with the company’s enduring value propositions.
In another report released on September 8, RBC Capital also initiated coverage with a Hold rating on the stock with a $263.00 price target.