Globant SA, a leading digital transformation services provider, experienced a 6.38% pre-market stock plunge on Friday, despite reporting impressive third-quarter financial results. The company's revenue grew 12.7% year-over-year to $614.7 million, driven by significant growth in AI-related work and expansion into new markets.

While Globant's overall performance was solid, the pre-market sell-off could be attributed to several key challenges. Firstly, foreign exchange headwinds impacted revenue growth, with the company reporting a 9% year-on-year increase in organic constant currency terms for Q3. Additionally, Globant experienced some pressure on operating margins due to currency fluctuations in Latin America.

Furthermore, the company's utilization rate of 79.8% was below its target range of 81% to 82%, indicating potential operational inefficiencies. Investors may also be concerned about Globant's early-stage expansion into the Middle East, which could require significant investment and time to realize full potential. The company acknowledged some under-penetration of AI in newer technologies, suggesting potential challenges in fully integrating AI solutions across all offerings.