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Shares of tech consulting firm Accenture (ACN) fell about 18% on Thursday, its worst single-day drop in years, after the company reported results for its fiscal third quarter (the period ended May 31, 2026). The stock was trading around $128 as of this writing and is down more than 50% year to date.
Accenture’s fiscal third-quarter performance appeared healthy on the surface. Earnings per share rose 9% year over year to $3.80, while revenue increased 6% to $18.7 billion. The company’s operating margin also ticked higher.
However, investors focused less on the just-reported quarter and more on what comes next—particularly the company’s outlook.
Accenture now expects full-year revenue to grow 3% to 4% in local currency, down from the 3% to 5% range it provided three months earlier. That reduces the midpoint of its growth target from 4% to 3.5%. With the company generating about $70 billion in annual revenue, even a half-point shift is meaningful for near-term demand expectations.
Management attributed roughly a percentage point of the drag to its U.S. federal business, where government cost-cutting has squeezed consulting contracts. Accenture said it expects that headwind to ease by the current quarter.
New bookings—an indicator of future revenue—also weakened. Accenture reported bookings of $19.3 billion, down from $19.7 billion a year earlier.
On the same morning as the earnings release, Accenture said it would spend about $4.18 billion to buy a majority stake in cybersecurity company Dragos and acquire two smaller security firms, runZero and NetRise. The acquisitions expand Accenture’s push into protecting operational technology, the systems behind power grids and factories.
CEO Julie Sweet said in the announcement that clients across industries and regions are asking Accenture to be more proactive and integrated in cybersecurity.
Investors may view the combination of slower organic growth and large deal spending as a difficult balance in the near term.
The broader concern driving the stock’s decline over the past year is whether AI is starting to reduce demand for the work that has helped Accenture become a consulting powerhouse.
A significant portion of consulting revenue comes from helping clients build software and integrate systems. If AI tools can perform more of that work faster, companies could require fewer billable hours.
Accenture’s consulting revenue grew just 1% in local currency last quarter, giving the AI-demand worry a tangible data point.
Accenture’s stance is that AI will be a tailwind rather than a substitute. The company says helping enterprises put AI to work is complex, expensive, and requires the kind of implementation work Accenture sells.
In its fiscal first quarter, Accenture booked $2.2 billion of what it calls advanced AI work. Management later stopped breaking out the figure, saying AI now runs through nearly everything it does.
On the latest earnings call, CEO Julie Sweet said, “We believe that AI will be a tailwind for us and our industry as it scales,” pushing back on the idea that the technology is denting demand.
The cybersecurity strategy is also framed as connected to AI adoption. As companies integrate AI into operational machinery, Accenture estimates the cybersecurity market tied to operational technology is about $27 billion today.
After Thursday’s drop, Accenture trades at a price-to-earnings ratio of about 11—levels it has not seen in years. The company generated $3.6 billion in free cash flow last quarter and returned $2.2 billion to shareholders.
While some investors may interpret the valuation as reflecting a future in which AI disrupts consulting and Accenture fails to adapt, the near-term signal investors are likely to focus on is bookings. The stock sell-off appears tied to the outlook and weaker bookings rather than the quarter’s earnings strength alone.
Accenture’s next steps will be closely watched for evidence that bookings stabilize or improve.
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