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The Bull Case For DXC Technology (DXC) Could Change Following Major Iberdrola Cloud Migration Partnership

Simply Wall St · 09/22/2025 14:17
  • In September 2025, Iberdrola announced it had partnered with DXC Technology to complete one of the Spanish energy sector's largest and most complex IT modernization projects, migrating 180 terabytes of data and 30 million lines of code from legacy systems to the Azure cloud.
  • This cloud migration has enabled Iberdrola to reduce costs, improve customer service, automate processes, and lay the groundwork for future AI integration and international scalability.
  • We'll examine how DXC Technology's leadership in large-scale digital transformation projects influences its broader investment narrative and future prospects.

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DXC Technology Investment Narrative Recap

If you’re considering DXC Technology as a potential investment, the core thesis centers on whether the company can successfully reposition itself as a provider of large-scale digital transformation and cloud migration solutions, offsetting persistent declines in legacy revenues. While the recent success with Iberdrola highlights DXC’s ability to deliver ambitious modernization projects, it does not materially resolve organic revenue declines or counteract the ongoing pressures in the company’s core Global Infrastructure Services segment, which remains the biggest risk for shareholders.

Among recent announcements, DXC’s August partnership with 7AI to launch an autonomous Agentic Security Operations Center stands out, signaling the company’s continued investment in AI-driven offerings. This is relevant to the Iberdrola win, given that both initiatives illustrate how DXC is aiming to expand its relevance in next-generation technology services and support revenue stabilization.

Yet, in contrast to these technological milestones, investors should be aware that persistent revenue declines in core segments threaten...

Read the full narrative on DXC Technology (it's free!)

DXC Technology's outlook anticipates $12.1 billion in revenue and $208.6 million in earnings by 2028. This scenario assumes a 1.7% annual revenue decline and an earnings decrease of $170.4 million from current earnings of $379.0 million.

Uncover how DXC Technology's forecasts yield a $15.12 fair value, a 10% upside to its current price.

Exploring Other Perspectives

DXC Community Fair Values as at Sep 2025
DXC Community Fair Values as at Sep 2025

Six members of the Simply Wall St Community have fair value estimates for DXC ranging from US$8.06 to US$261.89. Despite this breadth of opinion, organic revenue contraction remains a key concern and could weigh on DXC’s valuation for some time.

Explore 6 other fair value estimates on DXC Technology - why the stock might be worth 42% less than the current price!

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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.