--- title: "Cognizant signed Gilead for five years; Washington shut its green-card door two days later" description: "The October 8 PERM suspension left H-1B visas untouched, and Indian IT rallied 4.4 percent on October 13 on that read. Cognizant, the only US-headquartered company among the six suspended outsourcers, is where the assumption gets tested: 75.3 percent of its revenue is North American and its bull case is a margin turn due in the December quarter." publisher: "The Inference" section: "Labor" published: 2026-10-13T19:25:02.787Z modified: 2026-10-13T19:25:02.787Z canonical: https://theinference.org/article/cognizant-signed-gilead-for-five-years-washington-shut-its-green-card-door-two-days-later language: en keywords: "Immigration, H 1B, IT Services, Cognizant, Labor Policy, Earnings" --- # Cognizant signed Gilead for five years; Washington shut its green-card door two days later > The October 8 PERM suspension left H-1B visas untouched, and Indian IT rallied 4.4 percent on October 13 on that read. Cognizant, the only US-headquartered company among the six suspended outsourcers, is where the assumption gets tested: 75.3 percent of its revenue is North American and its bull case is a margin turn due in the December quarter. ## A five-year deal signed two days before the door shut On October 6, Surya Gummadi, [Cognizant](https://theinference.org/markets/companies/cognizant)'s president for the Americas, signed a [five-year extension of its technology work for the drugmaker Gilead Sciences](https://news.cognizant.com/2026-10-06-Cognizant-Expands-AI-Enabled-DevOps-Capabilities-for-Gilead-Sciences) [1]. Two days later the US Labor Department [suspended his employer, along with Microsoft, Adobe, Infosys, Tata Consultancy Services, Wipro, HCL Technologies and Capgemini, from the PERM program](https://www.businesstoday.in/technology/story/setback-for-it-giants-us-suspends-infosys-tata-wipro-hcl-cognizant-as-vance-targets-h-1b-abuse-560529-2026-10-08), the labor-certification step an employer clears before sponsoring a foreign worker for a green card [2][3]. The Inference reported on October 11 that [Washington froze Microsoft out of green cards and spared the two bigger visa sponsors](https://theinference.org/article/labor-department-freezes-microsoft-adobe-and-cognizant-out-of-green-cards-infosys-touches-a-six-year-low). New PERM filings from the eight are refused, and pending ones go unprocessed [2]. [Cognizant](https://www.finanznachrichten.de/nachrichten-2026-07/69154556-cognizant-technology-solutions-corporation-cognizant-reports-second-quarter-2026-results-008.htm)'s third-quarter report on October 29 is the first print that tests what the October 13 rally priced in [10]. ## What froze, and who was spared The H-1B work visas themselves were left alone [4]. A suspended firm's engineer can still be sponsored for a green card, just not by the firm he works for. Labor Secretary Keith Sonderling put the scale of the case in numbers: since 2009, he said, [the eight firms have requested almost 3 million foreign workers, drawing more than 230,000 H-1B approvals and 100,000 labor certifications](https://www.cnbc.com/2026/10/08/microsoft-adobe-green-card-labor-suspension.html) [5]. The biggest sponsors were not suspended. [Amazon](https://theinference.org/markets/companies/amazon) took 19,178 H-1B approvals in fiscal 2025 and [Meta](https://theinference.org/markets/companies/meta) 6,294, against [Microsoft](https://theinference.org/markets/companies/microsoft)'s 6,258, and neither was suspended [2]. In 2026 petitions Amazon leads at 35,426, with Cognizant second and Microsoft fourth [5]. *Chart: **The two biggest H-1B sponsors of fiscal 2025 were spared the freeze** Column chart of fiscal 2025 H-1B approvals: Amazon 19,178, Meta 6,294, Microsoft 6,258, with Amazon and Meta highlighted as the sponsors not suspended from PERM* *H-1B approvals, US fiscal year 2025 (October 2024 to September 2025), USCIS data as reported on October 12, 2026. Amazon and Meta were not suspended from PERM on October 8, 2026. [2]* ## The market priced containment, the filings price exposure On October 13 the Nifty IT index, the benchmark for India's listed IT exporters, jumped 4.4 percent, with HCL up 7 percent, on earnings and on the read that PERM is survivable [6]. TCS says its PERM filings ran in the single digits over two years, and Infosys [told its exchange on October 10 it expects no material impact](https://finance.yahoo.com/markets/stocks/articles/why-infosys-shrug-off-us-065617881.html) [4]. Analysts at Kotak Institutional Equities told clients the affected employees are a small subset of an already-localized US workforce [6]. That math rests on workforces that mostly deliver from India. Cognizant, the only US-headquartered firm among the six suspended outsourcers, [earned 75.3 percent of its $5.5 billion second-quarter revenue in North America](https://www.finanznachrichten.de/nachrichten-2026-07/69154556-cognizant-technology-solutions-corporation-cognizant-reports-second-quarter-2026-results-008.htm) [7]. Its GAAP operating margin sits at 15.9 percent against a 16.7 percent peak in early 2025, and full-year guidance of 16.0 to 16.2 percent adjusted assumes 20 to 40 basis points of expansion [7][8]. *Chart: **Cognizant's operating margin peaked at 16.7% in early 2025 and has drifted since** Line chart of Cognizant's GAAP operating margin over twelve quarters, peaking at 16.7 percent in Q1 2025 and standing at 15.9 percent in Q2 2026* *GAAP operating margin by quarter, per Cognizant's SEC filings. Full-year 2026 guidance of 16.0 to 16.2 percent adjusted assumes 20 to 40 basis points of expansion. [8]* ## The margin turn is timed to the same quarter as the freeze's costs Wedbush analyst Steven Wahrhaftig [holds the bull case at Outperform with a $70 target](https://www.msn.com/en-us/money/general/cognizant-continues-to-experience-high-demand-ahead-of-incoming-ai-revenue-streams-wedbush/ar-AA2dr0Q2), against consensus of $1.46 a share on $5.65 billion for the October 29 print [9]. The turn rests on Project Leap, a restructuring that cost $84 million in the second quarter out of a $230 to 320 million bill, the remainder spread across the third and fourth quarters, with the savings arriving only in fiscal 2027 [9][7]. [Kotak flags subcontractor costs pressing margins near term](https://finance.yahoo.com/technology/ai/articles/cognizant-set-durable-growth-margin-150618825.html), so the two pressures land in the same quarter [6][11]. ## The October 29 call answers it Kotak names its own limit: risk turns material only if restrictions reach existing work authorizations, client sites or outsourcing, which this measure does not [6]. Vice President JD Vance calls the H-1B program rife with fraud, though the White House has offered no evidence of fraud by Microsoft, and Microsoft says 80 percent of its roughly 6,000 filings covered existing staff [2]. Infosys reports on October 23; Cognizant follows on October 29, before the open [4][10]. The question on that call is narrow: does the 16.0 to 16.2 percent guide survive without a new line for immigration and subcontractor costs? ## Takeaway The October 13 rally assumed the PERM freeze stops at green cards. Cognizant's October 29 print, with 75.3 percent of revenue in North America and a 16.0 to 16.2 percent margin guide to defend, is the first test of that assumption. ## Sources 1. [Cognizant newsroom, "Cognizant Expands AI-Enabled DevOps Capabilities for Gilead Sciences", 6 October 2026](https://news.cognizant.com/2026-10-06-Cognizant-Expands-AI-Enabled-DevOps-Capabilities-for-Gilead-Sciences) 2. [Fortune via Yahoo Finance, "Satya Nadella went from H-1B worker to Microsoft CEO. The Trump administration just shut that path for his employees", 12 October 2026](https://finance.yahoo.com/technology/articles/satya-nadella-went-h-1b-193752422.html) 3. [Business Today, "Setback for IT giants: US suspends Infosys, Tata, Wipro, HCL, Cognizant as Vance targets H-1B abuse", 8 October 2026](https://www.businesstoday.in/technology/story/setback-for-it-giants-us-suspends-infosys-tata-wipro-hcl-cognizant-as-vance-targets-h-1b-abuse-560529-2026-10-08) 4. [TIKR via Yahoo Finance, "Why Infosys Can Shrug Off the US Green-Card Suspension, For Now", 11 October 2026](https://finance.yahoo.com/markets/stocks/articles/why-infosys-shrug-off-us-065617881.html) 5. [CNBC, "U.S. suspends Microsoft, Adobe from green card labor program in foreign worker crackdown", 8 October 2026](https://www.cnbc.com/2026/10/08/microsoft-adobe-green-card-labor-suspension.html) 6. [Goodreturns, "Indian IT Stocks In Blockbuster Rally; HCL Skyrockets 7%; TCS, Infosys, Coforge Up 3-6%", 13 October 2026](https://www.goodreturns.in/news/indian-it-stocks-in-blockbuster-rally-hcl-jumps-7-tcs-infosys-coforge-up-3-6-q2-results-dividends-1541049.html) 7. [Cognizant, "Cognizant Reports Second Quarter 2026 Results", PR Newswire, 29 July 2026](https://www.finanznachrichten.de/nachrichten-2026-07/69154556-cognizant-technology-solutions-corporation-cognizant-reports-second-quarter-2026-results-008.htm) 8. [Cognizant quarterly figures from its SEC filings (revenue, GAAP operating margin), retrieved 13 October 2026](https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0001058290) 9. [Seeking Alpha via MSN, "Cognizant continues to experience high demand ahead of incoming AI revenue streams: Wedbush", 2 October 2026](https://www.msn.com/en-us/money/general/cognizant-continues-to-experience-high-demand-ahead-of-incoming-ai-revenue-streams-wedbush/ar-AA2dr0Q2) 10. [Cognizant, "Cognizant Schedules Third Quarter 2026 Earnings Release and Conference Call", PR Newswire, 2 October 2026](https://finance.yahoo.com/markets/stocks/articles/cognizant-schedules-third-quarter-2026-120000616.html) 11. [MT Newswires via Yahoo Finance, "Cognizant Set for Durable Growth as Margin Expansion Expected to Begin in Q4, Wedbush Says", 2 October 2026](https://finance.yahoo.com/technology/ai/articles/cognizant-set-durable-growth-margin-150618825.html) --- Cognizant signed Gilead for five years; Washington shut its green-card door two days later — The Inference. Canonical: https://theinference.org/article/cognizant-signed-gilead-for-five-years-washington-shut-its-green-card-door-two-days-later