Accenture Suffers Record Drop as AI Fears Hit IT-Services Stocks

EarningsIndustry Impact 4
โดย The Motley Fool·Read original
Summary · why it matters

Accenture shares plunged about 18% on June 18, their worst single-day drop on record, after the consulting giant trimmed its full-year revenue growth outlook to 3% to 4% in local currency from 3% to 5%. The sell-off spread to peers EPAM Systems and Cognizant, which fell about 9% and 10% respectively, as investors worried that artificial intelligence could structurally shrink demand for project-based IT services. Accenture CEO Julie Sweet attributed part of the softness to the war in the Middle East, which she said cut about $100 million from fiscal third-quarter revenue, while EPAM, a pure-play digital engineering firm, has seen its stock fall roughly two-thirds from a January high above $220 and was dropped from the S&P 500 earlier this month. Cognizant, despite reporting a 21% rise in first-quarter bookings and signing seven deals worth $100 million or more, hit a 52-week low and now trades at around 9 times earnings. IBM, which derives only about a third of its revenue from consulting and saw software revenue rise 11% to $7.1 billion last quarter, slipped just 5% on the same day and commands a higher valuation of about 22 times earnings, reflecting its more durable recurring revenue base.

Impact on stocks 4

Artificial Intelligence▼ · 4 stocks
Accenture plc
ACN
▼ NegativeDemandrelevance

Accenture cut its full-year revenue growth outlook to 3%-4% from 3%-5%, citing AI fears reducing demand for project-based IT services and $100M hit from Middle East war.

EPAM Systems Inc
EPAM
▼ NegativeDemandrelevance

EPAM fell 9% as AI fears hit IT-services stocks; stock has fallen two-thirds from high and was dropped from S&P 500.

International Business Machines
IBM
± Mixedrelevance

IBM slipped only 5% and is mentioned as a comparison with more durable recurring revenue from software, not directly impacted by the news.

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