Accenture (ACN) Faces Profit Margin Pressure as AI Investments Rise

Accenture plc (NYSE:ACN) is one of the Top AI Stocks in the Spotlight on Wall Street. On September 26, Guggenheim analyst Jonathan Lee lowered the price target on the stock to $285.00 (from $305.00) while maintaining a Buy rating.

The firm noted that even though Accenture’s revenue growth was strong and management provided a FY26 outlook in line with expectations, investors are still worried about the company’s profit margins.

The company has announced yet another restructuring in the quarter to free up funds for AI-related investment. While this shows progress, it also raises profit-related concerns because of ongoing margin challenges and the frequent restructuring which implies deeper challenges.

“While ACN’s F4Q25 revenue growth came in toward the high end of its outlook range (+4.5% y/y cc revenue growth vs. +1–5% y/y cc revenue growth outlook) and management provided a FY26 outlook consistent with expectations, they did little to assuage the prevailing investor bear thesis on the potential for ongoing margin challenges. An announced restructuring in the quarter helps fund incremental investment in AI-related skillsets, but likely provides bears with tactical data points on a potential lack of durability in management’s profitability algorithm, particularly given: 1) ongoing gross margin challenges; and 2) this restructuring marks the company’s second in three years. We are moving our price target to $285 (from $305 prior) on the heels of ongoing sector multiple compression, though, over the medium term, expect the company to benefit from clients’ cost optimization initiatives and transformation agendas.”

Accenture plc (NYSE:ACN) offers strategy and consulting services.

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