What Happened?
Shares of global professional services company Accenture (NYSE: ACN) jumped 3.1% in the afternoon session after the company and Palantir Technologies disclosed they were selected by UK-based Sovereign AI to support the development and scaling of next-generation AI data centers across the EMEA region. Through this collaboration, Accenture will help establish a secure and resilient AI infrastructure for both government and commercial customers. The news signaled a significant step in the company's expansion into artificial intelligence. This move followed other recent AI-focused activities, including an agreement to acquire Faculty, a UK-based AI services business, to expand its capabilities. Additionally, Accenture invested in Profitmind, a retail technology company with an AI platform designed to help automate decisions for retailers.
After the initial pop the shares cooled down to $281.52, up 3.2% from previous close.
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What Is The Market Telling Us
Accenture’s shares are not very volatile and have only had 5 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 7 months ago when the stock dropped 7% on the news that the company reported weak first quarter 2025 (fiscal Q3) results: bookings in the quarter (a leading indicator of revenue) missed and EPS guidance was just in line. There were likely concerns about the sales pipeline as the number of new bookings (leading revenue indicator) fell 7%, compared to the more modest decline in the previous quarter. On the other hand, Accenture's revenue beat expectations. Revenue guidance for next quarter also topped Wall Street's estimates. Despite raising its full-year guidance for both revenue and EPS, the market's focus remained on the deceleration in bookings, suggesting concerns about the company's near-term growth prospects and the competitive landscape for IT services.
Accenture is up 8.3% since the beginning of the year, but at $281.52 per share, it is still trading 29.3% below its 52-week high of $398.25 from February 2025. Investors who bought $1,000 worth of Accenture’s shares 5 years ago would now be looking at an investment worth $1,091.
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