Accenture’s shares dropped to their lowest level since 2017 following a downward revision of the company’s revenue forecast, raising concerns about the impact of artificial intelligence (AI) on traditional IT and consulting services. The firm reported new bookings totaling $19.3 billion for the quarter ending in May, a 3 percent decline in local currency compared with the same period last year.
The company now expects full-year revenue growth of no more than 4 percent, revising previous guidance that projected growth between 3 and 5 percent. In response to the announcement, Accenture’s stock fell more than 18 percent in New York trading, extending a decline that has accelerated over the past year amid increasing investor anxiety about AI’s disruption of the consulting sector. The company’s market capitalization has shrunk from over $200 billion during the post-pandemic consulting boom to approximately $82 billion.
Chief Executive Julie Sweet emphasized that Accenture continues to secure business opportunities linked to AI adoption, despite investor concerns that AI could enable clients to reduce reliance on consulting firms or foster competition from AI-focused startups. She also cited the impact of the ongoing conflict involving Iran, which detracted about $100 million from revenue beyond initial expectations.
Accenture and other firms in the consulting industry have faced several years of subdued client spending on discretionary projects, a trend some analysts interpret as a sign of the transformative pressures emerging from AI technology. Surinder Thind, an analyst at Jefferies, described the latest results as disappointing and indicated that questions about the durability of demand in an "AI-first" environment are likely to increase.
Sweet noted that overall corporate IT budgets have not expanded, observing that while AI spending is growing, organizations are reallocating existing budgets rather than increasing them. In light of these challenges, Accenture is pursuing growth opportunities through acquisitions, planning to invest $9 billion on purchases in the current fiscal year.
As part of this strategy, the company announced three acquisitions aimed at enhancing cybersecurity capabilities for clients concerned about new risks posed by AI. Accenture will acquire runZero, a vulnerability assessment firm; NetRise, which specializes in device security; and a majority stake in Dragos, a company focused on cybersecurity for industrial systems. These moves reflect Accenture’s effort to strengthen its offerings amid a rapidly evolving technology landscape.