US multinational IT services company Cognizant Technology Solutions has significantly ramped up its capital return plans, announcing a sharp increase in its 2026 share buyback programme and signalling strong confidence in its long-term growth prospects amid a prolonged valuation reset in global technology stocks.
The company has doubled its 2026 buyback target to $2 billion, up from the earlier guidance of $1 billion, and said the additional $1 billion repurchase is likely to be completed in the second quarter itself. With this revision, Cognizant's total share repurchase authorisation now stands at $3.45 billion, marking one of its most aggressive capital return programmes in recent years.
The announcement, made on May 18, triggered a strong market reaction, with Cognizant shares surging nearly 10% on the Nasdaq in the last session to close at $51.395. The rally comes after a steep period of underperformance, with the stock having fallen significantly over the past year amid concerns over slowing growth in IT services and broader pressure on global technology valuations.
As part of its updated capital allocation plan, Cognizant also confirmed it will draw $1 billion from its existing revolving credit facility to support the planned acquisition of Astreya. The company said the move is consistent with its broader strategy of maintaining financial flexibility while pursuing targeted acquisitions alongside shareholder returns.
ALSO READ: Cognizant Layoffs: IT Major To Slash Up To 15,000 Jobs, Indian Workers To Be Most Hit, Says Report
The latest buyback expansion reflects what CEO Ravi Kumar S described as strong conviction in the long-term opportunity created by artificial intelligence-driven transformation across enterprise IT. He said the company believes its current valuation does not adequately reflect its growth potential, particularly as it positions itself as an “AI builder” within the evolving services landscape.
“We believe a fundamental shift in IT services is underway, one that strengthens Cognizant's position for future growth. Our current share price significantly undervalues those prospects,” he said, adding that early investments in AI capabilities are expected to help the company emerge as a leader in AI-led enterprise transformation.
Chief Financial Officer Jatin Dalal also emphasised that the company's strong balance sheet and robust free cash flows provide sufficient room to accelerate capital returns without compromising investments in growth or strategic mergers and acquisitions.
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
