Gartner Under Investigation Amid 20.87% Stock Price Drop Following Earnings Miss
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 4 days ago
0mins
Should l Buy IT?
Source: PRnewswire
- Earnings Miss: Gartner's 2026 revenue forecast of at least $6.46 billion falls short of the $6.71 billion expected by analysts, indicating potential growth challenges that could undermine investor confidence.
- Profit Forecast Shortfall: The company projects adjusted earnings of $12.30 per share for 2026, missing analyst expectations of $13.52 to $13.63, reflecting a decline in profitability that may erode shareholder trust in management.
- Stock Price Volatility: Following the earnings report, Gartner's stock plummeted by $42.24, or 20.87%, closing at $160.16 per share, a drastic drop that could trigger panic among investors and exacerbate market uncertainty.
- Legal Investigation Launched: Pomerantz LLP is investigating whether Gartner and its executives engaged in securities fraud or other unlawful business practices, which could expose the company to legal risks and further impact its market performance and shareholder interests.
Trade with 70% Backtested Accuracy
Stop guessing "Should I Buy IT?" and start using high-conviction signals backed by rigorous historical data.
Sign up today to access powerful investing tools and make smarter, data-driven decisions.
Analyst Views on IT
Wall Street analysts forecast IT stock price to rise
11 Analyst Rating
4 Buy
6 Hold
1 Sell
Moderate Buy
Current: 166.390
Low
150.00
Averages
190.70
High
240.00
Current: 166.390
Low
150.00
Averages
190.70
High
240.00
About IT
Gartner, Inc. delivers actionable, objective insight to executives and their teams. It operates through three segments: Research, Conferences and Consulting. The Research segment delivers independent, objective insight to leaders across an enterprise through subscription services that include on-demand access to published research content, data and benchmarks, and direct access to a network of research experts located around the globe. The Gartner Conferences segment is designed for information technology (IT) and business executives as well as decision-makers looking to adapt and evolve their organizations through disruption and uncertainty, navigate risks and prioritize investments. The Consulting segment serves chief information officers and other senior executives to optimize technology investments and drive business impact. The Company also provides solutions for a range of IT-related priorities, including IT cost optimization, digital transformation, and IT sourcing optimization.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
PC Market Faces Challenges from Soaring Memory Prices
- Surging Memory Prices: The demand for DRAM and NAND chips driven by AI infrastructure is causing memory prices to rise, with HP's bill of materials for PCs seeing memory and storage costs increase from 15%-18% to 35%, directly impacting its profit margins.
- Shifting Market Demand: Gartner forecasts a 10.4% decline in PC shipments in 2026, alongside a 17% increase in PC prices, prompting consumers and businesses to extend the lifespan of existing PCs, effectively eliminating budget PCs and putting pressure on the market.
- Profitability Pressure on HP: Although HP's Personal Systems revenue rose 11% year-over-year in Q1 2026, the surge in memory costs is expected to push its PC operating margins below long-term targets, posing risks to profitability.
- Apple's Market Opportunity: Apple's newly launched entry-level MacBook Neo priced at $599 capitalizes on rising Windows PC prices to attract budget-conscious consumers, and if successful in expanding its Mac user base, it will lay the groundwork for future growth.
See More
Software Stocks Decline, Nvidia CEO Rebuts Market Reaction
- Illogical Market Reaction: Nvidia CEO Jensen Huang argues that the market's reaction to AI is irrational, stating that many software companies are under pressure due to the belief that AI will replace them, which he describes as 'the most illogical thing in the world.'
- Microsoft's Cloud Market Share Growth: Microsoft increased its share of cloud infrastructure and platform services spending from 20% in September to 21% in December, indicating ongoing growth in its cloud computing market share driven by enhanced compute capacity and demand for Foundry AI services.
- Strong Financial Performance for Datadog: Datadog reported a 29% revenue increase to $953 million in Q4, with remaining performance obligations rising 52% to $3.4 billion, suggesting robust future revenue growth potential, although non-GAAP net income grew only 20% due to heavy R&D spending.
- AI Boosting Demand for Observability Software: Datadog was ranked as a leader in AI for IT operations by Forrester Research, and as cloud adoption and AI proliferate, its market share in core observability is expected to continue growing, making it a top priority for many IT departments.
See More
Software Index Falls 26% Amid AI Concerns
- Bear Market for Software: The S&P North American Technology Software Index has fallen 26% from its September all-time high, entering bear market territory primarily due to investor concerns that AI code generation tools may reduce demand for existing software products, leading to a bearish market sentiment.
- Microsoft's Attractive Valuation: Microsoft shares currently trade at $409, with a median analyst target price of $600, implying a 47% upside; its strong position in enterprise software and the integration of generative AI to enhance productivity have drawn investor interest amid market volatility.
- Datadog's Growth Potential: Datadog's current share price is $126, with a median analyst target price of $180, indicating a 42% upside; its AI applications in IT operations have been recognized by Forrester as a leader, highlighting strong market demand for its observability and security software.
- Strong Financial Performance: Datadog reported a 29% revenue increase to $953 million in Q4, with remaining performance obligations rising 52% to $3.4 billion, indicating robust future revenue growth potential, although non-GAAP net income grew slower due to heavy R&D spending, yet the long-term outlook remains optimistic.
See More
Microsoft Launches AI-Enhanced Office, Prices Up 65%
- Product Upgrade and Pricing: Microsoft has launched the Microsoft 365 E7 subscription at $99 per user per month, a 65% increase from the $60 E5 subscription, aimed at attracting enterprise users to adopt its Copilot AI add-on, thereby boosting overall revenue.
- AI Investment Returns: The company has invested over $100 billion in data center infrastructure over the past year, particularly in Nvidia chips to support AI model operations, with AI product sales being a crucial way to demonstrate returns on this investment, expected to drive future profit growth.
- New Feature Release: Copilot Cowork will be introduced as a research preview, designed to handle multi-step tasks such as sending scheduled emails and preparing meeting documents, which is anticipated to further drive the adoption of Copilot and enhance user productivity.
- Market Expansion Potential: Analysts note that the launch of the E7 subscription will encourage more organizations to upgrade to E5, with Microsoft’s 365 commercial products and cloud services representing 30% of total revenue in the December quarter, indicating strong growth potential in the market.
See More
Stocks Decline as Oil Prices Exceed $80 per Barrel
- Market Performance: U.S. stocks experienced a decline on Thursday due to rising oil prices.
- Investor Sentiment: The surge in oil prices negatively impacted investor confidence, leading to lower equity values.
See More
Gartner Under Investigation Amid 20.87% Stock Price Drop Following Earnings Miss
- Earnings Miss: Gartner's 2026 revenue forecast of at least $6.46 billion falls short of the $6.71 billion expected by analysts, indicating potential growth challenges that could undermine investor confidence.
- Profit Forecast Shortfall: The company projects adjusted earnings of $12.30 per share for 2026, missing analyst expectations of $13.52 to $13.63, reflecting a decline in profitability that may erode shareholder trust in management.
- Stock Price Volatility: Following the earnings report, Gartner's stock plummeted by $42.24, or 20.87%, closing at $160.16 per share, a drastic drop that could trigger panic among investors and exacerbate market uncertainty.
- Legal Investigation Launched: Pomerantz LLP is investigating whether Gartner and its executives engaged in securities fraud or other unlawful business practices, which could expose the company to legal risks and further impact its market performance and shareholder interests.
See More
PC Market Faces Challenges from Soaring Memory Prices
- Surging Memory Prices: The demand for DRAM and NAND chips driven by AI infrastructure is causing memory prices to rise, with HP's bill of materials for PCs seeing memory and storage costs increase from 15%-18% to 35%, directly impacting its profit margins.
- Shifting Market Demand: Gartner forecasts a 10.4% decline in PC shipments in 2026, alongside a 17% increase in PC prices, prompting consumers and businesses to extend the lifespan of existing PCs, effectively eliminating budget PCs and putting pressure on the market.
- Profitability Pressure on HP: Although HP's Personal Systems revenue rose 11% year-over-year in Q1 2026, the surge in memory costs is expected to push its PC operating margins below long-term targets, posing risks to profitability.
- Apple's Market Opportunity: Apple's newly launched entry-level MacBook Neo priced at $599 capitalizes on rising Windows PC prices to attract budget-conscious consumers, and if successful in expanding its Mac user base, it will lay the groundwork for future growth.
See More
Software Stocks Decline, Nvidia CEO Rebuts Market Reaction
- Illogical Market Reaction: Nvidia CEO Jensen Huang argues that the market's reaction to AI is irrational, stating that many software companies are under pressure due to the belief that AI will replace them, which he describes as 'the most illogical thing in the world.'
- Microsoft's Cloud Market Share Growth: Microsoft increased its share of cloud infrastructure and platform services spending from 20% in September to 21% in December, indicating ongoing growth in its cloud computing market share driven by enhanced compute capacity and demand for Foundry AI services.
- Strong Financial Performance for Datadog: Datadog reported a 29% revenue increase to $953 million in Q4, with remaining performance obligations rising 52% to $3.4 billion, suggesting robust future revenue growth potential, although non-GAAP net income grew only 20% due to heavy R&D spending.
- AI Boosting Demand for Observability Software: Datadog was ranked as a leader in AI for IT operations by Forrester Research, and as cloud adoption and AI proliferate, its market share in core observability is expected to continue growing, making it a top priority for many IT departments.
See More
Software Index Falls 26% Amid AI Concerns
- Bear Market for Software: The S&P North American Technology Software Index has fallen 26% from its September all-time high, entering bear market territory primarily due to investor concerns that AI code generation tools may reduce demand for existing software products, leading to a bearish market sentiment.
- Microsoft's Attractive Valuation: Microsoft shares currently trade at $409, with a median analyst target price of $600, implying a 47% upside; its strong position in enterprise software and the integration of generative AI to enhance productivity have drawn investor interest amid market volatility.
- Datadog's Growth Potential: Datadog's current share price is $126, with a median analyst target price of $180, indicating a 42% upside; its AI applications in IT operations have been recognized by Forrester as a leader, highlighting strong market demand for its observability and security software.
- Strong Financial Performance: Datadog reported a 29% revenue increase to $953 million in Q4, with remaining performance obligations rising 52% to $3.4 billion, indicating robust future revenue growth potential, although non-GAAP net income grew slower due to heavy R&D spending, yet the long-term outlook remains optimistic.
See More
Microsoft Launches AI-Enhanced Office, Prices Up 65%
- Product Upgrade and Pricing: Microsoft has launched the Microsoft 365 E7 subscription at $99 per user per month, a 65% increase from the $60 E5 subscription, aimed at attracting enterprise users to adopt its Copilot AI add-on, thereby boosting overall revenue.
- AI Investment Returns: The company has invested over $100 billion in data center infrastructure over the past year, particularly in Nvidia chips to support AI model operations, with AI product sales being a crucial way to demonstrate returns on this investment, expected to drive future profit growth.
- New Feature Release: Copilot Cowork will be introduced as a research preview, designed to handle multi-step tasks such as sending scheduled emails and preparing meeting documents, which is anticipated to further drive the adoption of Copilot and enhance user productivity.
- Market Expansion Potential: Analysts note that the launch of the E7 subscription will encourage more organizations to upgrade to E5, with Microsoft’s 365 commercial products and cloud services representing 30% of total revenue in the December quarter, indicating strong growth potential in the market.
See More
Stocks Decline as Oil Prices Exceed $80 per Barrel
- Market Performance: U.S. stocks experienced a decline on Thursday due to rising oil prices.
- Investor Sentiment: The surge in oil prices negatively impacted investor confidence, leading to lower equity values.
See More
Gartner Under Investigation Amid 20.87% Stock Price Drop Following Earnings Miss
- Earnings Miss: Gartner's 2026 revenue forecast of at least $6.46 billion falls short of the $6.71 billion expected by analysts, indicating potential growth challenges that could undermine investor confidence.
- Profit Forecast Shortfall: The company projects adjusted earnings of $12.30 per share for 2026, missing analyst expectations of $13.52 to $13.63, reflecting a decline in profitability that may erode shareholder trust in management.
- Stock Price Volatility: Following the earnings report, Gartner's stock plummeted by $42.24, or 20.87%, closing at $160.16 per share, a drastic drop that could trigger panic among investors and exacerbate market uncertainty.
- Legal Investigation Launched: Pomerantz LLP is investigating whether Gartner and its executives engaged in securities fraud or other unlawful business practices, which could expose the company to legal risks and further impact its market performance and shareholder interests.
See More
