Softcat's share price soared more than 9% following the announcement of an increased full-year profit guidance, driven primarily by a surge in corporate demand for AI-enabled infrastructure. This strong performance underscores the growing reliance on AI technologies across various industries.
The British IT reseller reported impressive double-digit growth in both gross profit and underlying operating profit during its third quarter, reflecting a broad-based uptick in business activity. The company noted that corporate customers are increasingly seeking AI-integrated solutions, leading to a significant pull forward of orders amid ongoing memory shortages in the market.
In light of these developments, Softcat's board now anticipates mid-teens growth in underlying operating profit for the full year, a notable increase from its previous prediction of high single-digit growth. Analysts, including Jefferies' Charles Brennan, indicated that the current market consensus was already leaning towards this positive trajectory, with estimates hovering around 10%. Brennan suggested that the revisions to guidance hint at an additional 4-5% upside potential.
"Growth remains broad-based with particular strength in corporate, supported by customer demand for AI-enabled infrastructure and continued pull forward of some orders due to memory shortages," Softcat stated in its earnings report.
Looking ahead, the company expressed optimism about maintaining its momentum and capturing further market share. However, it also acknowledged the challenges posed by persistent memory shortages and the uncertain macroeconomic landscape. Brennan cautioned that the company tends to rely on pulled forward orders, which could temper expectations for fiscal year 2027.
As Softcat navigates these dynamics, its ability to adapt to the rapidly evolving AI infrastructure will be critical. The firm’s stable performance highlights the increasing importance of AI solutions in corporate strategies, setting a precedent for other IT resellers in the market. Analysts will closely monitor how well Softcat can translate current demand into sustainable growth in the next fiscal year, especially as market conditions remain fluid.
Softcat's latest guidance and performance metrics not only reflect its current success but also indicate a significant shift in how companies are prioritizing AI infrastructure. This trend could have lasting implications for the IT sector and beyond, as businesses continue to invest in technology that drives efficiency and innovation.
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