TLDR
- Softcat stock jumped more than 9% Friday after the company raised its full-year profit outlook.
- The company now expects mid-teens growth in underlying operating profit, up from high single-digit growth previously.
- Strong Q3 results showed double-digit year-on-year growth in both gross profit and underlying operating profit.
- Corporate demand for AI-enabled infrastructure was cited as a key driver of growth.
- Customers are pulling forward orders due to global memory chip shortages, adding a short-term boost to results.
Softcat raised its full-year profit guidance on Friday, sending the stock up nearly 10% in early trading. The British IT reseller now expects mid-teens growth in underlying operating profit for the full year, a step up from its earlier forecast of high single-digit growth.
The stock was trading around the 9.9% mark by mid-morning in London, one of the stronger single-day moves the company has seen in recent years.
In its third-quarter update, Softcat reported double-digit year-on-year growth in both gross profit and underlying operating profit. The company pointed to broad-based demand across its customer base, with particular strength in the corporate segment.
“Growth remains broad-based with particular strength in corporate, supported by customer demand for AI-enabled infrastructure and continued pull forward of some orders due to memory shortages,” Softcat said in its statement.
The pull-forward dynamic is worth noting. Customers are placing orders earlier than usual to get ahead of supply constraints in global memory chips. That’s giving Softcat a short-term tailwind, but it also means some of today’s sales are borrowed from future quarters.
AI Infrastructure Demand Driving Corporate Spending
Softcat sits in a useful spot right now. As companies across the UK and beyond look to build out AI-capable infrastructure, demand for the hardware and services that support it has been rising steadily. Softcat has been a direct beneficiary of that trend.
The company said it is encouraged by business momentum and sees potential for further market share gains. But it was careful to flag two risks: ongoing memory chip shortages and the broader macroeconomic environment.
Memory chipmakers have struggled to keep pace with the surge in demand from tech developers and service providers racing to build AI systems. That has created a supply crunch that is pushing delivery timelines out and prompting customers to order early.
What Analysts Are Saying
Jefferies analyst Charles Brennan said the direction of the upgrade was not a surprise — the market had already been running ahead of company guidance — but the size of the move was notable.
“The magnitude implies further 4-5% upside,” Brennan wrote, adding that consensus had been sitting at around 10% growth.
His main question now is how this translates into fiscal year 2027. Softcat has a habit of leaning on pulled-forward orders as a reason to keep FY27 guidance conservative, and Brennan flagged whether consensus — which is starting to drift ahead of company messaging — will accept that framing.
That debate will likely dominate analyst calls in the weeks ahead. Softcat has been consistent in its approach: set conservative targets, then beat them. Whether that playbook holds into FY27 depends partly on how long the memory shortage tailwind continues and whether corporate AI spending holds up.
Softcat is based in Marlow, England, and provides IT products and services to corporate and public sector customers. The company has grown steadily by focusing on vendor relationships and technical support rather than competing on price alone.
For now, the numbers are moving in the right direction. Mid-teens operating profit growth is a solid outcome, and the market has responded accordingly.
🚨 Our MAY Stock Picks Are Live!
A new month means new opportunities. Our analysts have just released their top stock picks for May, highlighting companies with strong momentum that rank highly on our KO Score algorithm. We’re also now sharing trade ideas for both long-term and short-term investors, giving you more ways to spot potential opportunities in the market.
Sign up to Knockout Stocks today and get 50% off to unlock the full list and see which stocks made the cut.
Use coupon code Special50 for your exclusive discount!
Get 3 Free Stock Ebooks
Discover top-performing stocks in AI, Crypto, and Technology with expert analysis.
- Top 10 AI Stocks - Leading AI companies
- Top 10 Crypto Stocks - Blockchain leaders
- Top 10 Tech Stocks - Tech giants
