Teleperformance climbed on the stock market on Tuesday after a recommendation upgrade from Morgan Stanley, the intermediary judging that market concerns about disruptions linked to generative artificial intelligence (AI) are not in line with the reality of the sector.

Teleperformance shares lost 18.3% year-on-year, weighed down by a difficult 2023 financial year, with the group also a victim of uncertainties surrounding the rise of AI, while some investors fear that the deployment of this technology will call into question the group's business model.

"While we recognize the risk of AI disrupting Teleperformance's market share, we believe its impairment overstates the risks posed in reality," Morgan Stanley analysts say in a note.

On the Paris Bourse, at around 10:25 GMT, the share price was up 4.9% at 107.85 euros, compared with a loss of 0.74% for the SBF 120 index at the same time.

Analysts at Morgan Stanley point out that news about AI tends to have less impact on Teleperformance shares, which could mean that concerns are already embedded in the share price.

In February, Teleperformance had fallen 14% in a single session, after an announcement from online payments specialist Klarna about the deployment of an AI-based assistant.

Analysts add that the risk of AI completely isolating the group from the value chain is a "worst-case scenario" unlikely to materialize.

While Teleperformance's organic growth could decline slightly in the coming years, profitability could also gradually improve thanks to the automations enabled by AI, the note states.

"We are convinced that AI will have a deflationary effect on the group's sales (...) but we do not consider that automation will inevitably lead to insourcing and the resulting obsolescence of BPO [business process outsourcing] players", say Morgan Stanley analysts.

(Written by Pauline Foret, edited by Augustin Turpin)