EPAM: Partnering With Anthropic For Safe AI, As Agents Go Rogue (NYSE:EPAM)

EPAM Systems is upgraded to a buy as its Anthropic partnership positions it to capture enterprise AI governance and security demand.

EPAM targets $600M in FY-26 AI-native revenue, with Q2 AI-native sales exceeding $160M and comprising over 11% of total revenue.

Despite slow overall growth (Q3 sales guided up 1.7% YoY), EPAM's AI-driven EPS is expected to rise 11%+ YoY, with potential for further beats.

EPAM trades at a significant discount to IT peers, with a target price of $187 reflecting its AI momentum and strategic positioning.

Higher-value AI native revenues should receive a boost from the proliferation of autonomous software agents, making it more likely for many to turn rogue.