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  5. GIB.A: Why the sudden sharp drop in GIB. [CGI Inc. Class A Subordinate Voting Shares]
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Q: Why the sudden sharp drop in GIB.A ? Tariff issues? Long term holder here with large position. Is it time to sell half and use proceeds to buy another large Canadian tech company such as CSU.
Asked by MANFRED on March 03, 2025
5i Research Answer:

Several consulting companies were targeted by the General Services Administration as the 'highest paid' consultants for the US government, which could be subject to contract cuts by the US government. As part of DOGE's initiatives, many areas of the US government, including contractors could be cut from the budget going forward, which has negatively impacted GIB.A's share price and outlook, alongside many other consultants. 

It has some exposure to US government work ($2.6B last year, but this does include some commercial work) and this portion in particular might be more vulnerable, depending on how ugly the trade war gets. Now, with its giant backlog there is some offset to this concern, and valuation is already fairly low. So it is not something we would panic about, but something just to be noted and watched. While we feel more confidently about CSU over GIB.A for the long-term, we would consider this to be a fairly normal and healthy pullback for GIB.A.