Gartner (IT) faces a challenging environment for near-term growth amid potential pressure from AI disruption and macroeconomic uncertainty, Morgan Stanley said in a Tuesday research report.

The continued deceleration in contract value supports the argument that the company could face an uphill battle retaining clients and growing incremental new seats, the analysts said.

The company's guidance was disappointing across all measures. Earlier contract value outlook of high-single-digit growth by the end of 2026 was moved down to "accelerating" amid a volatile sales environment, according to the note.

Morgan Stanley reiterated its equalweight rating on the stock and cut its price target to $200 per share from $275.

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