New Delhi, June 8 -- The recent correction in US artificial intelligence (AI) stocks is a reminder that valuations matter, especially when expectations are sky-high. Fractal Analytics, trading at about 40 times estimated FY27 earnings, is no exception.

Its business is exposed to concentration risks, as is evident from its March quarter (Q4FY26) results. The US and top 10 clients, including Citibank, Nestle and Costco, contributed 68.4% and 51.9% of Q4 revenue, respectively.

Fractal's revenue grew only 19% in FY26 as client-specific issues in the technology, media and telecom (TMT) vertical weighed on growth. TMT contributes about a fifth of Fractal's revenue; without it, growth would have been an impressive 27.5%.

Note that Fractal is ...