What Happened?

A number of stocks fell in the morning session after disappointing fourth-quarter results from industry bellwether Gartner sparked widespread concerns about a slowdown in the sector. The research and advisory firm reported that revenue in its Consulting segment fell 12.8%. This weak performance from a major industry player appeared to validate broader market fears about the health of the IT services and consulting industry. The negative sentiment spread quickly, with shares of other major companies like Accenture and Intuit also falling sharply. The market now seems concerned about a potential slowdown in the sector's growth rate, compounded by uncertainty over the long-term impact of artificial intelligence on existing business models.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.

Among others, the following stocks were impacted:

• Advertising & Marketing Services company Omnicom Group (NYSE: OMC) fell 6.7%. Is now the time to buy Omnicom Group? Access our full analysis report here, it’s free.
• Data & Business Process Services company Verisk (NASDAQ: VRSK) fell 7.4%. Is now the time to buy Verisk? Access our full analysis report here, it’s free.
• IT Services & Consulting company DXC (NYSE: DXC) fell 6.7%. Is now the time to buy DXC? Access our full analysis report here, it’s free.
• Business Process Outsourcing & Consulting company Genpact (NYSE: G) fell 7.5%. Is now the time to buy Genpact? Access our full analysis report here, it’s free.
• IT Services & Consulting company Grid Dynamics (NASDAQ: GDYN) fell 10.1%. Is now the time to buy Grid Dynamics? Access our full analysis report here, it’s free.

Zooming In On Grid Dynamics (GDYN)

Grid Dynamics’s shares are very volatile and have had 24 moves greater than 5% over the last year. But moves this big are rare even for Grid Dynamics and indicate this news significantly impacted the market’s perception of the business.

The previous big move we wrote about was 14 days ago when the stock dropped 1.9% on the news that geopolitical tensions between the United States and the European Union escalated, sparking fears of a renewed trade war. The broader markets adopted a "risk-off" mode, with investors seeking safe-haven assets amidst the uncertainty. The market's primary fear gauge, the VIX, jumped to a fresh eight-week high, signaling rising investor anxiety. The dispute, centered on Greenland, raised the possibility of a revived trade conflict, which could disrupt global supply chains and economic activity. Mega-cap technology stocks, many of which have significant international sales and operations, were particularly affected by the souring risk sentiment as a potential trade war threatens their global business models.

Grid Dynamics is down 16.2% since the beginning of the year, and at $7.40 per share, it is trading 69.2% below its 52-week high of $24.05 from February 2025. Investors who bought $1,000 worth of Grid Dynamics’s shares 5 years ago would now be looking at an investment worth $528.27.

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