Shares of Grid Dynamics surged as much as 11.7% to €6.20 after the IT services firm reported second-quarter results that topped Wall Street's revenue expectations and revealed a milestone: revenue from artificial-intelligence projects now accounts for more than 30% of total sales, a threshold the company had never previously crossed.
The rally caps a sharp five-session run from €4.70 to €6.20 — a gain of roughly 32% — suggesting the market is repricing the stock around a single narrative: that Grid Dynamics is no longer just a legacy digital-engineering shop but an emerging AI services play.
Beating Estimates Matters More When You're Small Grid Dynamics' AI Bet Hits 30% of Sales — But Can a $6 Stock Sustain the Momentum?
Shares of Grid Dynamics surged as much as 11.7% to €6.20 after the IT services firm reported second-quarter results that cleared Wall Street's bar and delivered a headline number investors had been waiting for: AI revenue crossed 30% of total sales for the first time, growing 54.6% from a year earlier. The stock has rallied roughly 32% in five sessions, raising the question of whether the market is fairly pricing a real business-model shift — or front-running a story that still has serious caveats.
The Numbers Were Clean, If Not Spectacular
Grid Dynamics reported Q2 revenue of $108.16 million, above Wall Street's $106.58 million forecast, while adjusted earnings of $0.11 per share matched expectations.
Revenue grew 3.9% sequentially and 7.0% year-over-year, while non-GAAP EBITDA reached $14.7 million, or 13.6% of revenue — up from 12.6% a year ago. The beat was modest — about $1.58 million above the forecast, a surprise of 1.48% — but in a stock this small, even incremental proof of execution moves the needle.
AI Is Growing Fast Enough to Paper Over a Shrinking Legacy Business
AI revenue reached a record 30.7% of total revenue, marking the second consecutive quarter with year-over-year growth exceeding 50%. That matters because management acknowledged that legacy parts of the business continue to decline even as AI work accelerates, requiring the company to grow AI revenue fast enough to offset those declines. The CEO called the milestone "not a spike, but a sustained shift." Investors are betting he's right.
Customer Concentration Is the Risk Nobody's Pricing
Customer concentration remains a key risk, with 44% of revenue derived from the top five clients — up from 40.8% just one quarter earlier. Growth was led by the Tech, Media, and Telecom vertical, which surged 36.4% , but Retail was roughly flat while Finance and Healthcare declined slightly. One large client pulling back could erase a quarter's worth of AI gains.
The Balance Sheet Gives Management Options — For Now
Cash stood at $298.4 million with no debt drawn on its $30 million credit line.
The company repurchased approximately 2.6 million shares for $17.3 million since its last earnings call, totaling 4.4 million shares for $30.8 million under its buyback program.
It also acquired robotics firm Ekumen for $18.4 million to expand into physical AI. With full-year guidance of $435–$465 million — a midpoint above the ~$440 million analyst estimate — management is signaling confidence. Whether the stock, still 39% below its 52-week high, deserves a sustained rally depends on whether that 30% AI mix keeps climbing.