PARIS (Reuters) – Teleperformance shares rose on Tuesday after Morgan Stanley upgraded its recommendation, saying market concerns about disruption from generative artificial intelligence (AI) were out of sync with industry reality.

Teleperformance shares lost 18.3% over the year, weighed down by a difficult 2023 financial year, with the group also falling victim to uncertainties surrounding the rise of AI, while some investors fear that the deployment of this technology could call into question the group’s business model.

“While we acknowledge the risk that AI could disrupt Teleperformance’s market share, we believe its writedown overstates the risks actually posed,” Morgan Stanley analysts said in a note.

On the Paris Stock Exchange, at around 10:25 GMT, the share price rose by 4.9% to 107.85 euros, compared with a loss of 0.74% for the SBF 120 index at the same time.

Morgan Stanley analysts point out that AI news tends to have less impact on Teleperformance stock, which could mean the concerns are already priced in.

In February, Teleperformance fell 14% in a single session, after an announcement by online payments specialist Klarna on the deployment of an AI-based assistant.

Analysts add that the risk of AI completely isolating the group from the value chain is a “worst case scenario” unlikely to materialize.

While Teleperformance’s organic growth could decline slightly in the coming years, profitability could also gradually improve thanks to automation enabled by AI, the note specifies.

“We are convinced that AI will have a deflationary effect on the group’s turnover (…) but we do not consider that automation will inevitably lead to insourcing and obsolescence of BPO players [business process outsourcing] resulting from it,” say Morgan Stanley analysts.

(Written by Pauline Foret, edited by Augustin Turpin)

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