Overview

Morgan Stanley’s latest thematic analysis identifies three Latin American technology companies—Totvs, Globant and CI&T—as the region’s most resilient performers amid macro‑economic headwinds, emphasizing strong recurring‑revenue models, AI adoption and margin expansion.

Totvs (TOTVS)

The investment bank maintains an Overweight rating on Totvs, citing solid operating performance that underpins two investment pillars. Totvs delivered 15% growth in recurring revenues and posted a consolidated Adjusted EBITDA margin of 25%, contrasting with a slowdown in global SaaS peers. Proprietary surveys of Brazilian firms show ERP as a resilient technology spend category. AI‑enabler product sales now represent 19.4% of management’s recurring revenues, up 140 basis points year‑to‑date. Morgan Stanley trimmed the price target from BRL 53 to BRL 51, reflecting higher interest rates in Brazil. In its second‑quarter 2026 update, Totvs beat revenue forecasts while earnings per share missed consensus; the company reported a 28% year‑over‑year increase in gross ARR additions and a 22% rise in adjusted EBITDA.

Globant (GLOB)

Globant is trading at roughly a 30% discount to peer valuations. The firm’s AI‑native revenue outlook has been upgraded, with expected AI‑related ARR of at least USD 110 million by year‑end—a 38% increase versus prior guidance. The pipeline for new business already accounts for 18% of 2026 revenues. Free cash flow margin has risen to 11% on a twelve‑month basis, helping offset top‑line weakness. Morgan Stanley’s analysis of job postings shows 34% of open vacancies are senior professionals focused on AI implementation. Globant’s second‑quarter 2026 results showed revenue slightly above expectations but adjusted EPS missed consensus, and guidance for Q3 and the full year fell short of analyst projections, prompting Wedbush to downgrade the rating and leading Needham and UBS to lower their price targets.

CI&T Inc (CINT)

CI&T is projected to deliver industry‑leading 9.0% year‑over‑year growth in constant‑currency terms for fiscal 2027. The price target remains unchanged, as higher commercial spend and elevated interest rates in Brazil—accounting for roughly 50% of the company’s revenue—offset growth benefits. In its second‑quarter 2026 release, CI&T reported net revenue growth of 21.9% on an organic basis, surpassing guidance, while adjusted diluted EPS fell short of analyst forecasts.

Sector Outlook

Morgan Stanley highlights the broader Latin American tech sector’s ability to maintain momentum despite macroeconomic challenges, pointing to recurring‑revenue business models and margin expansion as key resilience factors. AI adoption is identified as a common growth driver across the highlighted firms.