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DXC Technology’s AI Push and Buybacks Raise a Deeper Question About Its Turnaround Strategy (DXC)

Simply Wall St·02/06/2026 12:06:57
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  • In late January and early February 2026, DXC Technology reported third-quarter fiscal 2026 results showing slightly lower sales of US$3,194 million but higher net income of US$107 million, trimmed its full-year revenue outlook, redeemed US$300 million of senior notes, expanded its buyback, opened a new AI hub in Sofia, and appointed Rob Le Busque as President of Asia Pacific & Japan.
  • Together, these moves highlight DXC’s attempt to balance cost discipline and balance sheet repair with investment in AI capabilities and refreshed regional leadership.
  • With recent share price weakness, we will explore how DXC’s AI hub expansion in Bulgaria shapes the company’s broader investment narrative.

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What Is DXC Technology's Investment Narrative?

For DXC to make sense in a portfolio, you have to believe its shift from shrinking legacy IT contracts toward AI-first services can eventually offset the ongoing revenue decline and pressure on earnings. The Sofia AI hub, with 200-plus specialists plugged into DXC’s Xponential framework, speaks directly to that thesis, but it is more a credibility signal than a near-term financial needle-mover. In the short term, the trimmed revenue outlook, high debt load and weak recent share price performance keep execution risk front and center, even as management returns cash via buybacks and redeems part of its 2026 notes. The new Asia Pacific & Japan president adds another layer of change that could influence bookings, but investors still face a story where balance sheet repair and AI investment have to work against a backdrop of declining sales.

However, investors should be aware that DXC’s high debt level remains a central concern. Despite retreating, DXC Technology's shares might still be trading above their fair value and there could be some more downside. Discover how much.

Exploring Other Perspectives

DXC 1-Year Stock Price Chart
DXC 1-Year Stock Price Chart

Four Simply Wall St Community fair values for DXC stretch from about US$8 to a very large US$261 per share, underlining how divided expectations are. Set that against DXC’s trimmed revenue outlook and execution risks around its AI hubs, and you can see why many readers may want to compare several viewpoints before deciding how the story might play out.

Explore 4 other fair value estimates on DXC Technology - why the stock might be a potential multi-bagger!

Build Your Own DXC Technology Narrative

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.