Globant SA (NYSE: GLOB), a leading provider of digital transformation services, saw its stock plunge 5.54% in pre-market trading on Friday, despite reporting strong third-quarter 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 financial performance was impressive, the pre-market sell-off could be attributed to a few key challenges the company faces. 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 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.