EquitiesMarket noteFriday 2 October 2026, 14:56
Accenture rose 16% on results that ease the fear that AI will eat its business
The consultancy beat its own forecast, booked $22.2bn of new work and expects growth of 3% to 6% next year. Its shares had lost about a third of their value this year on fears that AI would shrink demand.
By The Notebook Desk
Shares in Accenture, the IT services and consulting group, rose nearly 16% on Thursday to close at $212.30, GuruFocus reported, after results that beat forecasts on almost every line. Revenue in the three months to August was $18.68bn, up 7% in local currencies and above the top of the company’s own range, according to its results filing. New bookings, the contracts that turn into revenue later, were $22.17bn.
The move matters beyond one company, because this year Accenture’s shares had become a bet on the damage AI could do to IT services. Before the results they had lost about a third of their value in 2026, TIKR noted. The fear was that AI would do much of the advisory and staffing work that Accenture bills for by the hour.
A clean beat
Accenture had guided to revenue of $17.75bn to $18.40bn for the quarter. Analysts expected about $18.05bn and earnings of about $3.19 a share, Yahoo Finance reported. The company earned $3.29, up 9% on the adjusted figure a year earlier. Higher revenue and operating results added 22 cents a share, and buybacks, through a lower share count, added 13 cents. The operating margin rose to 15.3% of revenue, from an adjusted 15.1% a year earlier.
Growth was broad. All three regions grew by 7% in local currencies. Consulting revenue rose 7% and managed services, the long contracts to run clients’ systems, also rose 7%.
For the year to August, revenue was $74.18bn, up 5% in local currencies, against the 3% to 4% the company had guided to. It recorded 141 bookings of $100m or more in the year, its highest number yet, and returned a record $11.5bn to shareholders in dividends and buybacks.
What it says about AI
The question on the call was whether AI is a customer or a competitor. Julie Sweet, the chief executive, said that nearly 100 clients started their first advanced AI work with Accenture in the quarter, more than 400 over the year, according to the call transcript. It now has nearly 110,000 AI and data staff, against a goal of 80,000.
She did not deny that AI makes the work cheaper. “We are definitely giving more productivity due to AI,” she said. But “we continue to believe the opportunities related to AI are greater than the impact of AI-related efficiencies in our business.”
The outlook backs her. For the year to August 2027, Accenture expects revenue growth of 3% to 6% in local currencies and earnings per share of $14.39 to $14.81. The top of that range is faster growth than this year.
The caveats
Not every number was strong. Bookings grew 5% in local currencies, slower than revenue. Consulting bookings were $9.40bn, a book-to-bill of 1.0, which means new work only replaced what was billed. The managed services side, at 1.4, did better.
Cash came in more slowly. Free cash flow in the quarter was $2.85bn, down from $3.81bn a year earlier, and clients took 50 days to pay, up from 47.
Even after Thursday’s jump, the shares are well below where they began the year. Before the results they traded at about 12 times expected earnings, against nearly 18 times for IBM, TIKR noted. Investors were pricing in a slow decline. The results suggest the decline has not started yet.
What to watch
The next test is the first-quarter results, for the three months to November. Investors will look at whether consulting bookings pick up, as they are the clearest sign of new demand. The other test comes from AI companies themselves. If they sell more work directly to large companies, the bookings will show it before the revenue does.
Disclosure
This is analysis and opinion, not investment advice.