The demand for business process outsourcing (BPO) is rising due to flexibility and cost reduction, according to the Zacks Outsourcing Industry analysis. Key innovations such as the Internet of Things (IoT), cloud computing, artificial intelligence (AI), and machine learning (ML) are reshaping the sector. The Zacks Outsourcing industry currently ranks #112, placing it in the top 45% out of 247 industries, despite underperforming relative to the S&P 500, with a decline of 36.5% over the past year compared to a 27.5% gain in the index.
Investors are advised to consider stocks like TriNet (TNET), which reported a 24.6% year-over-year increase in adjusted EPS to $2.48, and Barrett Business Services (BBSI), which experienced a 5% year-over-year revenue growth. TriNet expects an adjusted EPS range of $2.15-$3.05 for 2026, while BBSI has a consensus estimate of $1.88 for the same period. Both companies have seen significant recent stock gains, with TNET up 33.3% and BBSI up 27.8% over the past month.
In addition to traditional BPO services, there is an urgent focus on cybersecurity, driving companies to outsource these needs to mitigate risks associated with evolving cyber threats. Businesses are increasingly adopting outsourced cybersecurity services to ensure compliance and support scalability.
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