Global renowned consulting firm Accenture has recently become the focus of the market, with its stock experiencing a strong surge on Thursday, almost reaching its highest point in half a year. The company's management happily announced that its performance has exceeded market expectations and successfully positioned itself as a key player in the generative artificial intelligence (AI) wave.
Julie Sweet, CEO of Accenture, confidently stated during the earnings call that the company is accelerating its leading position in the generative AI field. This statement received a positive response from the market, with the company's stock surging 5.6% on the day, setting a new closing high for the past six months.
Unlike many investors who focus on semiconductor, chip equipment, and server manufacturers, Accenture has taken a unique development path. The company specializes in providing consulting services to corporate clients, helping them with digital transformation to fully leverage the advantages of generative AI.
Sweet pointed out: "The emergence of generative AI marks the beginning of a transformative era. We anticipate that over the next decade, this technology will bring us and our clients significant growth opportunities, just as digital technology has continuously impacted us over the past decade." She added that generative AI can uniquely address numerous challenges and opportunities across all industries.
Data shows that Accenture has secured new generative AI orders worth $1 billion in the latest quarter, bringing the total related orders for the 2024 fiscal year to $30 billion. Throughout the fiscal year, the company's generative AI revenue approached $1 billion, nearly doubling from the previous year.
CFRA analyst Veronica Pasko maintains a strong buy rating on Accenture's stock and has raised the target price from $376 to $424. She emphasized that the continuous growth of AI orders is crucial for Accenture as the company strives to establish a leading position in this field.
Accenture's talent pool in the AI field is also expanding. Currently, the company has increased its AI workforce to 57,000 people, up from 55,000 in the third quarter and 53,000 in the second quarter. The company plans to expand its AI team to 80,000 by the end of the 2026 fiscal year. Considering the total new orders of $20.1 billion in the fourth quarter ending August 31, Accenture's AI business clearly has substantial growth potential.
The earnings report shows that Accenture's net income for the fourth quarter rose to $1.69 billion, with earnings per share at $2.66, significantly higher than the $1.37 billion and $2.15 per share of the same period last year. The adjusted earnings per share increased from $2.71 to $2.79, exceeding market expectations.
Although slightly underperforming in the third quarter, breaking a streak of seven consecutive quarters of exceeding profit expectations, Accenture regained its momentum in the fourth quarter with a revenue growth of 2.6% to $16.41 billion, surpassing analyst expectations.
Looking ahead, Accenture expects earnings per share for the 2025 fiscal year to be between $12.55 and $12.91, higher than the current market consensus of $12.85. Over the past three months, Accenture's stock has risen by 16.7%, far outperforming the S&P 500 index's 4.9% increase.
Accenture is swiftly entering the fast lane of the AI era. With its deep expertise in the consulting field and keen insight into new technologies, this consulting giant is riding the AI wave, opening up new horizons for itself and its clients. As AI technology continues to develop and its application scope expands, Accenture is poised to occupy a more important position in the future business landscape.
