EPAM faces AI-driven revenue challenges but trades cheaply with potential upside from AI growth and buyback plans.

EPAM Systems is experiencing near-term revenue pressure as AI reduces demand for traditional services like manual testing and user-experience tasks. Despite flat overall revenue, AI-native services now make up over 11% of EPAM's business and are growing strongly, helping margins and earnings per share improve. Activist investor Engine Capital is pushing for a $750 million share buyback, which could reduce shares outstanding and boost value. The stock trades at a low forward multiple of 8.7 times earnings, suggesting the market may be overly pessimistic about the company's transition to AI-driven growth, which could fill the legacy revenue gap by 2027.