Amanda Agati Says Strong Earnings Could Support US Equities

PNC Asset Management Chief Investment Officer Amanda Agati said strong corporate fundamentals and resilient consumer spending could support US equities heading into the third-quarter earnings season, Bloomberg reported. Speaking with hosts David Gura and Christina Ruffini on Bloomberg This Weekend, Agati noted that domestic equities remain favored over developed international markets due to strong US earnings growth.

Corporate Earnings and Software Stock Performance

The professional services firm reported $3.29 earnings per share on $18.68 billion in revenue, beating FactSet analyst forecasts of $3.18 a share on $18.03 billion. Following the earnings release, Accenture’s stock surged 16% on a Thursday.

The strong performance marked a shift from June, when Accenture reported weaker-than-expected third-quarter revenue and a disappointing forecast. At that time, industry concerns centered around artificial intelligence and geopolitical conflict in the Middle East causing customers to pull back spending, according to finance.yahoo.com.

Artificial Intelligence Demand and Client Reinventions

Accenture Chief Executive Officer Julie Sweet stated on a post-earnings call with analysts that large-scale client reinventions driven by artificial intelligence generated strong demand during the quarter. Sweet noted that much of the company’s growth stems from building the digital core, data foundations, and enterprise artificial intelligence stacks required to use the technology at scale, finance.yahoo.com reported.

Nearly 100 more clients initiated their first advanced artificial intelligence work with Accenture during the quarter, bringing the fiscal year-to-date total to more than 400 clients, according to finance.yahoo.com. Additionally, Anthropic named Accenture as an embedded evaluator last month to help implement safety checks for artificial intelligence development.

Investor Focus on Artificial Intelligence Returns

Agati stated that investors will watch for evidence that artificial intelligence investment is generating returns beyond the largest technology companies as third-quarter earnings unfold, Bloomberg reported. Accenture shares remain down 18% for the year, while industry peers Capgemini and Infosys have dropped 24% and 37%, respectively, according to finance.yahoo.com.