Endava’s AI Challenge: Can the Tech Consultancy Bridge the Gap?

The technology sector is increasingly divided between those capitalizing on the artificial intelligence boom and those struggling to keep pace. Endava, the IT services and consulting firm, currently finds itself in the latter category. As AI hardware leaders like Nvidia and Microsoft report staggering financial results, Endava is confronting significant transformation hurdles. The critical issue facing investors is whether the company can successfully navigate this transition or risk permanent laggard status.

Mounting Pressure on Traditional Tech Models

Recent trading analysis reveals a troubling pattern: market participants are categorizing Endava alongside legacy technology firms falling behind in the accelerating AI race. The primary challenges stem from sluggish AI integration efforts, compounded by persistent macroeconomic headwinds. Although the company surpassed profit expectations for the fourth quarter of fiscal year 2025, it simultaneously downgraded its full-year revenue outlook for fiscal 2026. This downward revision signals continuing operational difficulties.

The performance gap between AI-focused enterprises and traditional tech consultancies continues to widen. While Endava contends with modest AI investment levels and operational obstacles, competitors are capturing substantial value from the global capital shift toward artificial intelligence infrastructure and services.

A Strategic Pivot Meets Market Skepticism

Endava’s leadership acknowledges the imperative for change and is actively pursuing an “AI-native” corporate transformation. Chief Executive Officer John Cotterell emphasized in September that more than half of the workforce is already utilizing AI tools in client projects. Despite this stated progress, investor sentiment remains cautious. Recent trading activity reflects this uncertainty, with the stock experiencing intraday swings exceeding 5 percent before ultimately settling with a 1.7 percent decline.

Should investors sell immediately? Or is it worth buying Endava?

Technical indicators continue to suggest a negative medium-term outlook for Endava shares. Extreme volatility persists, with measurements exceeding 100 percent, underscoring substantial investor apprehension about the company’s future trajectory.

Critical Reporting Period Approaches

Market attention now turns to November, when Endava will disclose first-quarter results for fiscal year 2026. These figures must demonstrate tangible progress in the company’s AI initiatives to restore confidence. Current analyst ratings reflect this transitional phase, ranging from “Hold” to “Moderate Buy” recommendations. This spectrum captures the cautious optimism about long-term potential while acknowledging near-term operational challenges.

The coming quarters represent a crucial proving ground for Endava. In a financial landscape that shows little patience for companies slow to adapt, the company must rapidly translate its strategic vision into measurable results. The success or failure of this AI transformation will ultimately determine whether Endava secures its position in the new technology paradigm or becomes permanently disconnected from the AI value chain.