The Accenture stock price has crashed in the past few weeks as concerns about its US government contracts rose. The ACN share price dropped to $285 on Thursday, down by almost 30% from its highest level this year. It is now hovering at its lowest level since June 2024, leading to a $71 billion wipeout as its market cap crashed.
Accenture and IT consultants are losing contracts
The main reason why the Accenture stock price has imploded this year is that it is suffering from Elon Musk’s DOGE Effect. On this, the company and other IT consultants are seeing their government contracts disappear.
Just this week, the government slashed a $4 billion IT contract awarded to Deloitte, Accenture, and Booz Allen Hamilton. In his statement, Secretary Pete Hegseg said that the contract was non-essential and that it would be done by the employees.
The DoD is not the only government agency that has slashed contracts with Accenture. The Department of Health has also slashed some contracts with the company.
In a recent report by the FT, the federal government has threatened to cut contracts worth hundreds of billions of contracts as these companies made “insulting” proposals. This comes as the government asked the 10 largest firms to come up with ideas to save money.
The Trump administration is pressing on with large cost cuts as it advances a $4.5 trillion tax cut package that passed the House of Representatives this week. He hopes to cut over $2 trillion in costs, with consulting companies providing a low-hanging fruit.
ACN warns on government contracts
Accenture has warned that the DOGE effect will have an impact on its business since it generates billions of dollars annually. In its statement, the firm said that the its federal business represents about 8% of its business, with 16% coming from the Americas. The CEO said:
“Based on our significant experience across federal and commercial clients, we see major opportunities over time for us to help consolidate, modernize, and reinvent the federal government to drive a whole new level of efficiency.”
The ongoing trade war could also impact the company. In periods of high volatility, companies often start to cut costs, starting from marketing and then to procurement, including IT consulting.
Therefore, analysts believe that the company may struggle to achieve its targets, which the management maintained. Analysts expect its results to show that its revenue rose by 4.85% in the last quarter to $17.27 billion. That will translate to an annual figure of $68.6 billion, a 5.8% annual increase.
Still, analysts believe that Accenture stock price is cheap, and that it will ultimately surge to $361, up from the current $285. They expect that the current crisis will be brief and that the management will ultimately pivot to other areas.
Accenture stock price analysis
The weekly chart shows that the Accenture share price has collapsed from a high of $395 to the current $285. It has plunged below the 50-week moving average and the lower side of the ascending channel shown in green. That is a sign that bears have prevailed for now.
Also, the MACD and the Relative Strength Index (RSI) have all plunged in the past few monts and are nearing the oversold level. Therefore, the next target to watch will be at $233, its lowest swing in March 2023, which is about 18% below the current level.
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