AI threats intensify, Accenture's stock price falls to its lowest level since 2017

BlockBeats news, June 20, according to the UK Financial Times, consulting firm Accenture saw its share price fall by 18% on Thursday, closing at its lowest level since 2017. The decline followed the company's downward revision of its revenue forecast, raising investor concerns that the rapid development of AI is undermining traditional IT consulting and outsourcing business models.

Accenture stated that in the three months ended at the end of May, the company's new orders dropped to $19.3 billion, a 3% decrease year-on-year. The company expects annual revenue growth to not exceed 4%, below the previous upper guidance range of 3% to 5%. Accenture’s market capitalization has fallen from over $200 billion after the post-pandemic consulting boom to less than $80 billion.

Accenture CEO Julie Sweet said the company is still winning business in AI-related consulting as enterprises adopt the technology, but investors are worried that AI could lead customers to rely less on consultants or bring new competition from AI startups. She also mentioned that the Middle East war had a $100 million greater impact on revenue in the most recent quarter than expected and slowed decision-making among customers in other regions.

Accenture is seeking new areas for growth and has substantially increased its acquisition budget, which will reach $9 billion for this fiscal year. On Thursday, the company announced three cybersecurity-related acquisitions, including vulnerability assessment firm runZero, device security firm NetRise, and a majority stake in operational technology cybersecurity company Dragos. The total enterprise value of the three transactions is $4.2 billion.