IT Services Stocks Slide as AI Fears Hit Accenture 25% and Peers by a Third
Updated
Updated · Financial Times · Jun 23
IT Services Stocks Slide as AI Fears Hit Accenture 25% and Peers by a Third
3 articles · Updated · Financial Times · Jun 23
Summary
Accenture sank 25% last week, and Cognizant, Capgemini, Tata Consultancy Services and Infosys are down by a third or more as investors bet AI will displace core IT consulting work.
That selloff reflects fears that clients can use AI providers directly for system design and rollout, while OpenAI’s purchase of consultancy Tomoro signaled major model makers are moving deeper into services.
About $10 billion of Accenture’s annual sales also comes from the public sector, leaving consultants exposed as efficiency drives in Washington and London threaten another important source of demand.
Accenture is pushing back with a doubled $9 billion acquisition budget and AI partnerships across the sector; it says revenue from its top 10 ecosystem partners is on track to more than double.
Even so, the market gives little credit: Accenture’s $80 billion market value leaves it trading below 9 times next year’s earnings, despite forecasts for 4% to 6% sales growth and 17% third-quarter operating margins.
Will the consulting giants' multi-billion dollar AI acquisitions redefine their value, or just delay their inevitable decline?
As consultants partner with AI giants, can they still offer unbiased advice, or is their vendor neutrality a thing of the past?
IT Services Stocks Plunge in June 2026: AI Disruption Fears Trigger Sector-Wide Selloff and Revaluation
Overview
In June 2026, IT services stocks, led by Accenture, faced a sharp downturn as investors reacted negatively despite the company’s strong margins and cash flow. The market demanded clearer signs of faster revenue growth, leading to a dramatic sector-wide sell-off. Accenture’s valuation dropped to less than 10 times its projected earnings, reflecting skepticism about future growth. This downturn was fueled by fears that artificial intelligence could disrupt traditional business models and reduce revenues, causing investors to question the long-term prospects of IT service providers and prompting a major shift in market sentiment.