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The FTSE 100 has its very own artificial intelligence (AI) play, and it’s easily the best-performing growth stock on the blue-chip index in the last year.
The company is Computacenter (LSE: CCC), and its shares have rocketed 126% in 12 months. That’s streets ahead of second-best performer, eastern European bank Lion Finance Group, which ‘only’ grew 90%. So what’s going on?
Home-grown tech hero
Computacenter is a technology services company that helps big businesses and public sector organisations buy, install and manage their IT. It’s benefited from the huge spending spree on digital infrastructure, supplying servers, networking equipment and services to companies building increasingly powerful computing systems.
The result? First-half 2026 revenue soared 72% to £6.85bn, while adjusted operating profit jumped 87% to £153m.
Computacenter also has a foot in North America, and this market was the star performer, with operating profit more than doubling as it won business from hyperscalers, neocloud and enterprise customers. Computacenter shot into the FTSE 100 in June although before that, its performance was pretty uneven.
So this is an AI play, but as a beneficiary of AI infrastructure rather than a developer. In some respects, that makes it less risky, as it’s not engaged in a life-or-death race to invent the world’s supreme chatbot.
But it does depend on customers continuing to spend enormous sums on AI infrastructure. If the boom slows, lucrative orders could be delayed or disappear altogether.
Unsurprisingly after such a strong run, Computacenter isn’t cheap with a price-to-earnings ratio of 31. That’s twice the FTSE 100 average. The trailing dividend yield is just 1.35%.
Three reasons the shares could keep climbing:
- AI infrastructure spending could remain enormous for years as companies build ever larger computing capacity.
- Computacenter’s North American expansion gives it access to a much bigger technology market.
- Its strong balance sheet gives it scope to make acquisitions and keep investing in growth.
Three reasons they may struggle:
- A slowdown in hyperscaler spending could hit orders hard after such rapid growth.
- The shares are now priced for substantial future earnings growth, leaving less room for disappointment.
- Computacenter operates on relatively thin margins, so a change in the mix of business could have a disproportionate effect on profits.
So what do the experts think? Eleven analysts give a median one-year target of 6,206p, If correct, that would mark rather more modest growth of almost 14% from today’s 5,454p. Eight rate it a Buy, while four say Hold. None say it’s a Sell.
Computacenter looks like a fascinating business. It offers genuine exposure to the AI spending boom, rather than simply slapping AI onto its marketing material. But today’s investors have missed out on the early action.
Investors might still consider buying but, personally, I think it’s a bit too late. I’ll get over it. Like many investors, I already have outsized exposure to US tech and AI, and don’t really need more. Happily, I can see other exciting UK growth stocks out there today.
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Harvey Jones does not hold any positions in the companies mentioned.
This story originally appeared on Motley Fool
