Big 3 IT Services Earnings Preview: Solid Orders & Margin Gains to Drive Profit Growth; If Investors Focus on Top Line, Shares May Stay Range-Bound

Research evidence excerpt

Big 3 IT Services Earnings Preview: Solid Orders & Margin Gains to Drive Profit Growth; If Investors Focus on Top Line, Shares May Stay Range-Bound

Idea

July 27, 2026 06:30 AM GMT

Morgan Stanley MUFG Securities Co., Ltd.+MIT & Software | Japan Tetsuro Tsusaka, CFA

Equity Analyst

Big 3 IT Services Earnings Tetsuro.Tsusaka@morganstanleymufg.comLuyuan Yang, CFA +81 3 6836-8412

Luyuan.Yang@morganstanleymufg.com +81 3 6836-8423

Preview: Solid Orders & Margin Keiji Nishimura

Research Associate

Keiji.Nishimura@morganstanleymufg.com +81 3 6836-8424

Gains to Drive Profit Growth; If

Investors Focus on Top Line,

Shares May Stay Range-Bound IT & Software

Japan

Expect Japanese IT services demand to remain resilient, thanks Industry View In-Line

to AI-related digital transformation, contrasting with softer

demand for traditional IT services in the US. IT service providers

are at the center of AI deployment, while recent results from US

IT companies' Japan operations and SaaS vendors have also been

solid. Focus on higher hardware prices impact on IT spending.

Key Takeaways

Weaker US IT services demand still a concern, but we expect AI investment in

Japan to stay robust, supporting solid Jun-Q results.

Higher hardware prices could pressure IT budgets, making enterprise investment

trends a key focus.

Fujitsu & NEC: With easy comps, order recovery will be the key focus in Jun-Q.

NRI: Facing a tougher comps base, growth in Financial IT, Industrial IT, and

cybersecurity will be critical.

We expect all three companies to deliver profit growth, although hardware and

overseas profitability will likely shape market sentiment.

Will Japanese IT services demand remain resilient despite weakness in traditional

US IT services? US IT services earnings have raised concerns about weakening