Accenture Shares Drop 57% Amid AI Business Model Skepticism

Accenture Plc has seen its market value decline by approximately $150 billion as shares fell 57% from their late 2021 peak. Investors and analysts are questioning whether artificial intelligence will render the company's labor-arbitrage model obsolete, which currently relies on large numbers of junior staff in low-cost locations such as India and the Philippines.

CEO Julie Sweet has defended the company's strategy, characterizing AI as a tailwind and urging employees to use the technology to reinvent how they work. To facilitate this transition, the company has launched a massive staff education program and expanded its capabilities through cybersecurity acquisitions and the purchase of the British AI startup Faculty.

Despite these efforts, investors remain cautious. AI-related initiatives have not yet produced meaningful revenue acceleration, and the company expects a decline in new bookings for the quarter ending August.