Cognizant shares drop as US suspends co from green card program

Cognizant Technology Solutions Corp fell 0.5% in morning trading Thursday after the U.S. Labor Secretary Keith Sonderling suspended the company from the Permanent Labor Certification Program, allowing company employees to obtain legal status and green cards in the United States. The suspension also affected Infosys, Tata, Wipro, HCL, and Capgemini.

Sonderling cited abuse of the system as the reason for the suspension. The program plays a central role in how offshore-oriented IT services companies source and retain skilled labor in the United States.

The regulatory action follows several positive business developments for Cognizant. The company recently secured a five-year AI-enabled DevOps contract extension with Gilead Sciences and established a cloud finance transformation partnership with aviation technology firm SITA. Cognizant also launched Cognizant Activate, a new business unit focused on mid-market enterprise AI adoption.

Wedbush reiterated its Outperform rating on Cognizant on October 2 with a $70 price target. The company's short interest stands at approximately 8% of the float.

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