Globant Plunges 12.9%: Earnings Volatility and AI Strategy Spark Investor Anxiety

Summary
• Globant (GLOB) slumps 12.9% intraday to $68.02, its lowest since June 2023
• Q2 2025 revenue grows 4.5% to $614.2M, but $47.6M optimization charge weighs on sentiment
• RSI at 25.65 and MACD -3.76 signal bearish momentum amid $52.7B market cap contraction

Globant’s sharp selloff reflects investor skepticism over its $3.7B AI pipeline and $1.53 EPS performance. Despite a 25% year-over-year pipeline surge, the stock’s 62.8% YTD decline and 52-week low of $65.73 highlight fragility. With $174.2M cash and $255M net debt, the AI repositioning faces scrutiny as North America revenue declines 2% sequentially.

Earnings Volatility and Strategic Overhead Weigh on Shares
Globant’s 12.9% intraday drop stems from a $47.6M one-time charge tied to its Business Optimization Plan, which included 3% workforce reductions and office consolidations. While Q2 revenue rose 4.5% to $614.2M, North America—a 54.1% revenue segment—saw a 2% sequential decline, signaling macroeconomic headwinds. The $1.53 adjusted EPS beat Zacks estimates but failed to offset concerns over $2.9M negative free cash flow and a $3.7B pipeline conversion slowdown. Management’s emphasis on AI Pods and subscription models, though innovative, faces execution risks amid extended sales cycles.

Bearish Technicals and High-Leverage Puts Signal Short-Side Opportunity
• 200-day MA: $151.49 (far above) | 30-day MA: $84.90 (above) | RSI: 25.65 (oversold)
• MACD: -3.76 (bearish) | Bollinger Bands: $71.12–$95.87 (current price near lower band)

Technical indicators confirm a bearish setup. The stock trades below all major moving averages, with RSI in oversold territory and MACD diverging downward. Key support levels at $79.44 (30D) and $217.36 (200D) are irrelevant in the short term. High-liquidity puts like GLOB20250919P70 and GLOB20250919P75 offer leveraged downside exposure. These contracts align with the 52-week low and $65.73 intraday low, suggesting a potential test of $60–$65.

• GLOB20250919P70 (Put): Strike $70, Expiry 2025-09-19, IV 52.73%, Leverage 12.88%, Delta -0.5167, Theta -0.0142, Gamma 0.03525, Turnover 27,797
- IV at 52.73% (mid-range), Leverage 12.88% (moderate), Delta -0.5167 (balanced sensitivity), Gamma 0.03525 (strong price sensitivity)
- Payoff at 5% downside (ST=64.62): max(0, 70 - 64.62) = $5.38 per contract. High gamma ensures responsiveness to price drops.

• GLOB20250919P75 (Put): Strike $75, Expiry 2025-09-19, IV 61.74%, Leverage 7.34%, Delta -0.6426, Theta -0.0053, Gamma 0.0282, Turnover 41,927
- IV at 61.74% (high), Leverage 7.34% (moderate), Delta -0.6426 (high sensitivity), Gamma 0.0282 (moderate sensitivity)
- Payoff at 5% downside (ST=64.62): max(0, 75 - 64.62) = $10.38 per contract. High delta amplifies gains in a sharp decline.

Aggressive bears should prioritize GLOB20250919P70 for its balance of leverage and gamma. If $65 breaks, GLOB20250919P75 offers amplified short-side potential.

Backtest Globant Stock Performance
The backtest of GLOB's performance after a -13% intraday plunge shows mixed results. While the 3-day win rate is 53.42%, indicating a higher probability of recovery in the short term, the 10-day and 30-day win rates are lower at 47.20% and 49.69%, respectively. This suggests that while GLOB may bounce back in the immediate aftermath of the plunge, longer-term performance is more uncertain.

Short-Term Bear Case Confirmed: Target $60–$65 as AI Reinvestment Plays Out
The 12.9% drop confirms a bearish reversal, with RSI at 25.65 and MACD -3.76 signaling continued pressure. Watch for a breakdown below $65.73 (52-week low) to validate the $60–$65 target. The $47.6M optimization charge and $2.9M free cash flow highlight near-term liquidity risks. Sector leader Accenture (ACN) rose 0.52%, suggesting IT Services resilience, but Globant’s AI repositioning faces execution hurdles. Aggressive short-sellers should target GLOB20250919P70 if $68.02 breaks intraday.