Accenture had the worst day in its history on the stock market on Thursday, and the reason cuts to the heart of the AI era: investors increasingly fear that AI will hollow out the consulting business itself.
Shares fell as much as 20 per cent, the company’s worst one-day drop on record, after it forecast weaker revenue for the current quarter. The stock is now down more than 50 per cent this year.
The immediate triggers were a soft outlook and the war in the Middle East, which Accenture said cut about $400mn from sales in the quarter, with more expected. But the deeper worry is structural.
“AI is disrupting demand across consulting and managed service,” Bloomberg Intelligence wrote. Apollo’s Scott Kleinman recently argued that professional services, law firms, accountancies, and consultancies, are the next sector after software to be disrupted by AI.
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For a company that sells AI transformation for a living, the fear is that the same technology makes much of its own labour redundant.
Rivals were hit too. Capgemini and Infosys are down more than 30 per cent this year, and Cognizant and IBM fell on the day.
The numbers behind the drop
The quarter itself was not a disaster. Revenue rose 6 per cent to $18.7bn and earnings per share climbed 9 per cent to $3.80.
It was the forward look that spooked investors. New bookings fell about 2 per cent, Accenture guided current-quarter revenue below analyst expectations, and it trimmed its full-year growth forecast to 3 to 4 per cent.
The $4.18bn answer
On the same morning, Accenture made its pivot explicit. It agreed to buy a majority stake in Dragos and all of runZero and NetRise for a combined $4.18bn, a bet on securing the physical world.
The three specialise in operational technology security, protecting the systems that run power grids, pipelines, factories, and data centres, an area Accenture argues is dangerously underfunded as AI makes critical infrastructure both more connected and more exposed.
The deals add about $208mn in annual recurring revenue and expand a cybersecurity arm that has grown from $700mn in 2016 to $10bn last year.
It is part of a wider land grab. Accenture says it now plans to spend $9bn on acquisitions this year, up from $5bn, alongside smaller deals this week for Siemens-focused software firm IndX and Italian digital-health company Alfahealth.
The logic is the same one driving the selloff, read in reverse. As AI threatens to automate the white-collar work at the core of Accenture’s business, the company is buying its way toward the parts of tech that are growing and harder to replace, like defending critical infrastructure from increasingly AI-powered attacks.
Whether $4.18bn of cybersecurity can outrun the disruption tanking the stock is the question now hanging over the consulting industry.
