Accenture cuts revenue growth forecast as AI worries investors

In short: Accenture lowered its revenue growth forecast after new client bookings fell, and investors are worried AI could weaken its consulting business.

What happened

Accenture, one of the world’s biggest IT consulting firms, said it expects slower revenue growth this year than it previously predicted. It now forecasts full-year revenue growth of up to 4%, compared with its earlier range of 3% to 5%.

The company also reported weaker demand in a key measure called “new bookings”, which is the value of new work clients have agreed to buy. New bookings fell to $19.3 billion in the three months to the end of May, down 3% compared with the same period last year when measured in local currencies.

After the update, Accenture shares fell 14% in pre-market trading. The Financial Times reported the stock was on track to open at its lowest level since 2018.

Accenture’s CEO, Julie Sweet, has said the company is winning work from clients that want help adopting AI. But investors worry AI could also reduce the need for traditional consultants, either because companies do more work themselves using AI tools (like using a calculator instead of hiring someone to do the math), or because new AI-focused start-ups compete for the same projects.

Accenture also said it spent $4.2 billion on two acquisitions to strengthen its cyber security services.

Why it matters

Many large companies pay firms like Accenture to plan, build, and run their technology. If AI lets businesses do more of that work with smaller teams, it could change how much they spend on outside help, and that can affect jobs, prices, and services across the broader tech industry.

Source: Financial Times