Gartner (IT) is expected to deliver a modest improvement in Q2 contract value growth amid potential headwinds from companies redirecting IT spending toward generative AI plans, RBC Capital Markets said in a Sunday note.

The report said Q2 contract value is expected to grow about 1.7%, driving revenue to about $1.67 billion and adjusted EPS to $3.85, both "moderately" above consensus.

Looking ahead, modest improvement is expected in contract value growth on fading DOGE/tariff headwinds, better retention, and improving sales productivity, the report said.

"That said, we're tracking potential headwinds from companies redirecting discretionary IT spending toward GenAI initiatives," the note added.

RBC kept its sector perform rating and a price target of $160.

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