Accenture’s shares plunged to their lowest level since 2017 following a downward revision of its revenue forecasts, raising concerns among investors about the impact of artificial intelligence on the company’s traditional IT and consulting services. The firm reported new bookings of $19.3 billion for the quarter ending in May, representing a 3 percent decline in local currency terms compared to the same period last year.
The company now expects full-year revenue growth to be capped at 4 percent, narrowing its previous guidance range of 3 to 5 percent. Shares dropped more than 17 percent in New York trading, extending a broader decline that has accelerated over the past year amid widespread investor unease over AI’s potential to disrupt the consulting sector. Accenture’s market valuation has contracted sharply, from over $200 billion following a post-pandemic surge to approximately $82 billion currently.
CEO Julie Sweet acknowledged continued demand from clients seeking advice on AI adoption but noted concerns remain that the technology could allow companies to reduce reliance on consultants or stimulate competition from AI-focused startups. Sweet also attributed part of the weaker performance to geopolitical tensions stemming from the war in Iran, which she said suppressed revenue by roughly $100 million beyond prior estimates and caused slower decision-making among customers globally.
The consulting industry has faced multiple years of subdued spending on discretionary projects, trends some analysts link to the uncertain influence of AI. Surinder Thind, an analyst at Jefferies, described the results as disappointing and suggested that questions around the durability of demand in an “AI-first world” are likely to intensify.
Sweet added that overall corporate IT budgets have not increased despite AI-related investments, as companies are allocating funds differently rather than expanding spending. In response, Accenture has increased its focus on growth through acquisitions, planning to spend $9 billion on deals during the current fiscal year.
On the same day it reported earnings, Accenture announced three acquisitions aimed at enhancing its cybersecurity capabilities, an area of growing importance as organizations seek to defend against threats posed by new AI models. The company intends to acquire runZero, a firm specializing in vulnerability assessment; NetRise, which focuses on device security; and a majority stake in Dragos, an operational technology cybersecurity specialist.