Asia Pacific Tech Services Market Declines 11% in Q4 Amid Weak Cloud Demand
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1h ago
0mins
Source: Businesswire
- Market Performance Decline: The Asia Pacific technology services market saw a sharp 11% decline in fourth-quarter annual contract value (ACV) to $5.5 billion, marking the worst performance since Q1 2023 and ending a five-quarter growth streak, indicating significant weakness in demand for cloud and managed services.
- Managed Services Plummet: Managed services ACV fell 36% in Q4 to $735 million, down 18% from Q3, reflecting a double-digit decline in both new-scope and restructured contracts, highlighting a drastic reduction in market demand.
- Industry Disparities: While the overall market struggled, engineering services ACV nearly doubled, increasing 93% to $152 million, driven by heightened demand for AI readiness, contrasting sharply with declines of 60% and 29% in financial services and manufacturing, respectively, underscoring significant industry variances.
- Optimistic Future Outlook: ISG forecasts a 2.1% revenue growth for managed services and a 20% growth for cloud-based software and services (XaaS) in 2026, indicating that despite current market challenges, cloud migration and AI adoption will continue to drive future growth.
Analyst Views on III
Wall Street analysts forecast III stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for III is 6.75 USD with a low forecast of 6.50 USD and a high forecast of 7.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
2 Analyst Rating
2 Buy
0 Hold
0 Sell
Moderate Buy
Current: 5.890
Low
6.50
Averages
6.75
High
7.00
Current: 5.890
Low
6.50
Averages
6.75
High
7.00
About III
Information Services Group, Inc. is a global artificial intelligence (AI)-centered technology research and advisory firm. The Company specializes in digital transformation services, including sourcing advisory, cloud and data analytics; managed governance and risk services, network carrier services, technology strategy and operations design; change management, and market intelligence and technology research and analysis. The Company’s ISG Network and Software Advisory services and its software platforms, including ISG GovernX and ISG Tango. ISG GovernX includes real-time third-party risk management capabilities, including integrated data feeds and real-time alerts. ISG Tango sourcing platform is an AI-embedded, comprehensive solution that enables enterprises and public sector organizations to evaluate their business requirements and identify desired outcomes. Its AI Maturity Index, a data-driven assessment platform designed to benchmark workforce readiness for AI at scale.
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.
