Morgan Stanley has highlighted a group of Latin American technology firms that the bank believes exhibit durability through a challenging macroeconomic backdrop. The analysis concentrates on companies demonstrating steady operational performance, expanding margins, recurring revenue growth and tangible adoption of artificial intelligence-related products.
Overview
The bank’s review underscores the sector’s capacity to sustain momentum even as broader headwinds persist. Morgan Stanley focused on recurring-revenue business models and margin expansion as central pillars for evaluating resilience in the region’s tech names.
1. Totvs
Morgan Stanley keeps an Overweight rating on TOTVS, pointing to consistent operating results that support the bank’s investment case. The company reported 15% growth in recurring revenues and a 25% consolidated Adjusted EBITDA margin, figures that contrast with the slowdown observed in some global SaaS peers. Proprietary surveys conducted by the bank indicate that enterprise resource planning - ERP - remains among the most resilient categories for technology spending within Brazilian firms amid rising macroeconomic pressures.
The firm also noted Totvs stands to benefit from expanding AI adoption in Brazil: sales of AI-enabler products rose to 19.4% of management recurring revenues, an increase of 140 basis points year-to-date. Despite these operating strengths and sustained profitable growth, Morgan Stanley observed the stock has lagged the recent rebound seen in global SaaS names. To account for higher interest rates in Brazil, the bank trimmed its price target from BRL53 to BRL51.
In Totvs’ second-quarter 2026 financial update, revenue exceeded analyst forecasts while earnings per share fell short of estimates. The company reported a 28% year-over-year increase in gross ARR additions and a 22% rise in adjusted EBITDA.
2. Globant
Globant is trading at roughly a 30% discount versus peers, according to Morgan Stanley, and continues to navigate an industry transition using three principal levers outlined by the bank. The company’s outlook for AI-native revenues has been lifted and is now expected to reach at least USD110 million in annual recurring revenue by year-end, a projection Morgan Stanley says represents a 38% increase versus prior guidance.
Morgan Stanley also points to the company’s pipeline: new business opportunities already account for 18% of projected 2026 revenues. To help offset top-line weakness, Globant is improving free cash flow conversion, with a last-twelve-months free cash flow margin of 11%.
The bank’s review of job postings indicates 34% of current open positions are for senior professionals responsible for building and deploying AI across complex enterprise environments.
Globant’s second-quarter 2026 results showed revenue slightly above expectations while adjusted earnings per share missed consensus. The company provided third-quarter and full-year guidance that fell below analyst projections, prompting at least one downgrade and several price-target reductions among other firms.
3. CI&T Inc
CI&T’s operating momentum continues to benefit from the scale-up of large projects that are driving above-industry growth rates. Morgan Stanley projects CI&T to deliver industry-leading 2027 revenue growth of 9.0% year-over-year in constant currency. The bank left its price target unchanged, citing increased commercial spending and elevated interest rates in Brazil - a market that accounts for approximately 50% of CI&T’s revenues.
For the second quarter of 2026, CI&T reported net revenue growth of 21.9% on an organic basis, surpassing company guidance. However, adjusted diluted earnings per share were below analyst forecasts.
Bottom line
Morgan Stanley’s selections emphasize recurring revenue durability, margin progression and concrete AI-related revenue contributions as distinguishing features among Latin American technology companies. Each firm highlighted delivered revenue beats in the quarter but also posted adjusted earnings per share that missed consensus, and the bank adjusted valuations to reflect a higher-rate environment in Brazil where applicable.