Key Points
Accenture closed up about 16% after jumping as much as 22%, its biggest intraday gain on record, after posting fiscal fourth-quarter revenue of $18.7 billion, above the top of its own guidance range.
The consulting giant signed a record 141 client deals worth $100 million or more in a single quarter and guided fiscal 2027 revenue above Wall Street's estimates.
The 10-year Treasury yield touched 5.34%, its highest level since 2002, a day after Treasuries logged their worst quarter since 1994.
Brent crude jumped back above $100 a barrel on a report that the U.S. is sending a third aircraft carrier to the Middle East.
The S&P 500 rose 0.19% to 7,666.45, while the Dow and Nasdaq each edged up 0.04%. Nike fell more than 3% after the bell on a sales miss.
For most of this year, Wall Street had a simple story about Accenture: AI is coming for the consultants.
The stock was down about 30% for the year heading into Thursday. Investors feared AI tools would automate the very work Accenture gets paid to do.
Then Accenture reported earnings.
The stock jumped as much as 22% Thursday morning, the largest intraday percentage gain in Accenture's trading history, according to Dow Jones Market Data going back to 2001. It gave back some of that move but still closed up 15.8% at $212.30, one of the best performances in the S&P 500 on the day.
The Numbers That Flipped the Story
For the quarter that ended Aug. 31:
Revenue: $18.68 billion, up 7% in local currency, versus the $18.03 billion analysts expected (LSEG)
Adjusted EPS: $3.29, versus $3.18 expected
New bookings: $22.2 billion, a book-to-bill ratio of 1.2
Big deals: a record 141 client bookings of $100 million or more
For fiscal 2027, Accenture guided to revenue of $76.43 billion to $78.65 billion, versus the $76.41 billion analysts expected. It also raised its quarterly dividend 5% to $1.71 and plans to return at least $9.5 billion to shareholders.
CEO Julie Sweet took the AI fears head-on. "We continue to believe the opportunities related to AI are greater than the impact of AI-related efficiencies in our business," she told analysts.
Nearly 100 more clients started their first advanced AI projects with Accenture this quarter, bringing the fiscal-year total to more than 400. In September, Accenture also struck a deal with Anthropic to embed safety experts inside the AI developer's labs, with each company committing at least $1 billion over five years. We wrote recently about how Anthropic is now handing out multibillion-dollar contracts.
There was one warning sign. Accenture said pricing was lower in many areas, as clients push to keep part of the savings AI creates.
The Whole Group Caught a Bid
"A lot of institutions feel they're underinvested in software," said Steve Sosnick, chief market analyst at Interactive Brokers. "That was clearly the case with Accenture, and investors are quickly reevaluating their views on the company."
Cognizant (NASDAQ: CTSH) rose about 6% to $60.88, and IBM (NYSE: IBM) gained about 2.6% to $225.62.
Meanwhile, Bond Yields Hit a 24-Year High
The 10-year Treasury yield climbed as high as 5.34% Thursday morning, a level last seen in April 2002. That came one day after Treasuries finished their worst quarter since 1994.
Then a soft manufacturing report sent investors back into Treasuries. The 10-year yield reversed to close near 5.24%, down about 5 basis points on the day. The 2-year yield, which tracks Fed expectations most closely, fell nearly 10 basis points to about 4.79%.
Fed officials are in no hurry. Vice Chair Philip Jefferson said he sees no urgency to move on rates.
The ISM manufacturing index slipped to 54.5 in September, below the 55.0 forecast, though its prices index jumped to 77.9 from 71.1.
Oil kept climbing. West Texas Intermediate crude rose about 2.8% to $92.91 a barrel, and Brent jumped about 4.3% to $102.25 on the report of a third U.S. carrier heading to the Middle East. That came after Trump rejected Iran's deal, and talks remain stalled.
Stocks spent much of the morning in the red before a late bounce in chip stocks pulled the major averages higher. The S&P 500 rose 14.91 points, or 0.19%, to 7,666.45. The Dow added 20.51 points, or 0.04%, to 50,926.56. The Nasdaq gained 10.53 points, or 0.04%, to 26,871.60.
The Day's Other Big Movers
Synopsys (NASDAQ: SNPS) jumped about 12.8% to $490.54 after laying out targets through 2030 and announcing a revenue-sharing partnership with OpenAI to build a chip-design AI model called GPT-Synopsys. Amazon's AWS also signed a deal worth about $1 billion to license its chip-design technology.
Micron (NASDAQ: MU) rose about 3% to $1,097.39 the day after its record quarter, as chip stocks rallied into the close.
Constellation Energy (NASDAQ: CEG) gained about 1.9% after signing a 20-year deal with Amazon tied to expanding a Maryland nuclear plant.
United Therapeutics (NASDAQ: UTHR) climbed about 5.4% after BTIG upgraded it to buy following Wednesday's court win. Liquidia (NASDAQ: LQDA) fell about 7.5% on the other side of that ruling.
Nike After the Bell
Nike reported after the close, and the market didn't like the top line. Fiscal first-quarter revenue fell 4% to $11.21 billion, short of the $11.32 billion analysts expected (LSEG). Earnings of $0.48 a share beat the $0.43 estimate.
The bigger problem was the outlook. Nike now expects full-year revenue to decline by a high-single-digit percentage, with adjusted EPS of $1.15 to $1.35. Greater China sales fell 22%. Shares fell more than 3% in after-hours trading, to around $33.87.
What Lands Next
Friday: The September jobs report. Economists expect payrolls to rise by roughly 85,000 to 98,000, down from 162,000 in August. Weekly jobless claims fell to 197,000 Thursday. A hot number could push yields right back toward Thursday's highs.
Later this month: Big-bank earnings kick off third-quarter reporting, and the Fed meets Oct. 27-28.
For nine months, Wall Street treated Accenture as an AI casualty. On Thursday, it found out the company is still signing record deals. The question now is how many other "AI losers" have been priced for a disaster that isn't happening.
This article is for informational and educational purposes only and does not constitute investment advice or a recommendation to buy or sell any security.
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