Kyndryl Holdings (KD) Valuation Check After New Agentic AI Mainframe Services and Vodafone Idea Partnership Renewal

Kyndryl Holdings (NYSE:KD) just put a brighter spotlight on its AI story, rolling out new agentic AI mainframe services and renewing a three year transformation partnership with Indian telecom operator Vodafone Idea.

See our latest analysis for Kyndryl Holdings.

These AI launches and the Vodafone Idea renewal land at a tricky moment for investors, with the share price at $26.3 after a weak year to date share price return of 25.96% and a much stronger three year total shareholder return of 148.11%. This suggests long term momentum is still very much intact even as near term sentiment has cooled.

If this kind of AI infrastructure story has your attention, it might be worth exploring other potential winners among high growth tech and AI stocks as you think about where to position your portfolio next.

With earnings turning higher, revenue still grinding upward and the stock trading at a steep discount to analyst and intrinsic value estimates, is Kyndryl a quietly mispriced AI infrastructure play, or is the market already discounting that future growth?

Most Popular Narrative: 33.4% Undervalued

With Kyndryl last closing at $26.30 versus a narrative fair value of $39.50, the valuation debate centers on how durable its margin and earnings reset really is.

The company's focus on expanding AI, data, and cybersecurity services supported by investments in proprietary initiatives like Kyndryl Bridge and new alliances such as Databricks is allowing Kyndryl to address rising complexity and security requirements, supporting both higher margins and new revenue streams.

Read the complete narrative.

Curious how modest revenue growth expectations can still back a sharply higher value, thanks to a powerful earnings ramp and shifting profit mix? The narrative lays out the exact margin pathway, capital return assumptions, and future earnings multiple it believes the market is missing. Want to see the full blueprint behind that gap?

Result: Fair Value of $39.50 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, ongoing legacy contract runoff and execution hiccups in large account transitions could delay the earnings ramp and keep valuation upside in check.

Find out about the key risks to this Kyndryl Holdings narrative.

Build Your Own Kyndryl Holdings Narrative

If you see the story differently or want to dig into the numbers yourself, you can craft a full narrative in just a few minutes: Do it your way.

A great starting point for your Kyndryl Holdings research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.