Japan Technology It Services Sector Investment Strategy

This report analyzes the Japanese IT services sector, arguing that concerns regarding AI-led disruption are overstated for major local system integrators. Analysts highlight strong fundamental growth outlooks driven by modernization demand and AI-driven development.

Key Takeaways

• 1.Major Japanese system integrators are seen as unlikely to be severely disrupted by AI due to low customer in-house development ratios compared to the US.
• 2.Medium-term business plans (MTPs) at major integrators forecast solid profit growth, with AI-driven development and margin improvement as key drivers.
• 3.Global IT services revenue has been on a gradual recovery since 2024, though broader optimism is tempered by geopolitical uncertainty.

Table of Contents

• Chapter 1: Medium-term plans
• Chapter 2: Earnings summary and outlook