Temenos shares gained after the software company lifted its mid-term guidance, pushing back on worries over the impact of artificial intelligence on the sector.

Shares were up 6.2% in Zurich on Wednesday, the most in four months, as the company gave a solid outlook for this year and raised its targets for 2028, saying it is well positioned to deliver on its strategy. Temenos provides software to banks and wealth managers, including AI-assisted products.

“Obligations and regulations do not shrink with AI,” Chief Executive Officer Takis Spiliopoulos said in an interview ahead of the firm’s capital markets day Wednesday. “Banks have zero tolerance for errors and hallucinations,” he said, adding there is “very significant risk aversion” in the industry.

Stocks of some software companies, including Temenos, have suffered as investors eye the disruptive impact of AI technology. Temenos said it sees stable demand from banks despite AI risks. Shares of the firm are down 14% this year.

The banking sector has a “very high adoption threshold” toward AI and heavy regulation shields it from these risks, Spiliopoulos said.

Spiliopoulos is confident about expansion in the US, saying the pipeline is full after the company quadrupled sales headcount to tackle the US market. “These people obviously have been building a very strong pipeline, which we’re going to execute and convert in 2026.”

The company sees revenue growth of around 12% in 2026 and raised its full year targets for 2028. The raised target should “support consensus revisions,” according to Citi analyst Pavan Daswani, “particularly given recent sector‑wide sentiment softness.”

This year, Temenos is launching an AI conversational layer, among other AI tools, meant to be deployed on client facing channels. The Geneva-based company is set to unveil more details on its AI strategy during its investor day later today.

— By Isabel Demetz and Allegra Catelli (Bloomberg News)