Accenture’s shares cratered after its AI sales pitch ran into war, weak guidance and investor suspicion.
Accenture, one of the world’s biggest professional-services outfits, warned that current fiscal-year revenue could fall short of expectations.
The IT consulting giant blamed upheaval in the Middle East and growing investor nerves about whether its AI future is quite as shiny as advertised.
Its shares plunged 18 per cent in early-afternoon trading, sinking to their lowest level in nearly 10 years after the firm cut revenue guidance.
Accenture said it had taken a $400 million hit to sales in the Middle East, which is not a rounding error even for a consultancy this bloated.
Accenture chief executive Julie Sweet told analysts the Iran conflict had disrupted business in the region and created ripple effects beyond it.
Sweet said the war had prompted corporate clients to tighten discretionary spending, which is consultant-speak for fewer fat invoices landing on time.
Professional-services shares have been battered this year as investors fret that AI tools will replace some of the work those firms charge handsomely to do.
Accenture has been hit particularly hard, with its stock down 51 per cent this year despite employing nearly 800,000 people worldwide.
Other tech-services sellers have taken bruises too. IBM fell six per cent on Thursday and is down 15 per cent this year, while Infosys has dropped about 40 per cent.
Accenture’s growth now depends on convincing clients it can help them implement AI, but investors are increasingly wondering whether it can deliver.
Accenture said some clients pushed projects expected this fiscal year into the next one, which begins on 1 September.
Morgan Stanley downgraded Accenture earlier this week and cut its price target, pointing to concerns about its acquisition strategy and “product-focused” deals.
Just before the analyst call, Accenture said it planned to buy a majority stake in Dragos and acquire two other security firms outright.
Accenture said demand for large projects remained strong, with 104 quarterly client bookings worth $100 million or more year to date, up 13 per cent.
