Key Points
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Consulting and IT services stocks, including Accenture, Cognizant, and Infosys, are either roughly flat or down as much as 31% this year.
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Yet U.S. management and technical consulting jobs jumped by 17,300 in October, the biggest monthly gain since December 2024.
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Accenture trades at about 18 times this year’s expected earnings, but its own filings warn that AI could reduce demand for its services.
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Investors have spent 2026 betting that artificial intelligence will put consultants out of work. Through Tuesday’s close, Accenture (NYSE:ACN) was roughly flat this year, Cognizant (NASDAQ:CTSH) was down 20%, and Infosys (NYSE:INFY) was down 31%. Others have fallen just as hard: EPAM Systems (NYSE:EPAM) and research firm Gartner (NYSE:IT) are each down about 20%. Fueling the declines, investors have worried that if AI can write code and analyze data, companies will need fewer people to do it and fewer outside firms to manage it.
But recent jobs data tells a different story.
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Hiring is picking up
Employment in U.S. management and technical consulting rose by 17,300 in October to about 1.9 million, according to preliminary Bureau of Labor Statistics data. That was the largest monthly gain since December 2024, bringing the year-over-year increase to about 46,000 jobs, or 2.5%.
LPL Financial thinks AI is the reason. “Companies are not simply spending on chips, servers, and data centers, they are also hiring specialized workers who can help integrate new technology into existing workflows,” it wrote in a market commentary this week. It compared the trend to the late 1990s, when consulting jobs grew at double-digit rates as businesses adopted the internet.
In other words, buying AI is the first step, but making it work inside a bank, hospital or factory takes people.
What Accenture’s numbers show
Accenture, the biggest name in the group, is still growing, just slowly. In its fiscal year ended Aug. 31, revenue rose 6% to $74.2 billion, and it set a record with 141 client bookings of $100 million or more. The company employs about 814,000 people, a reminder of how much of this business still runs on people. Fourth-quarter new bookings, a measure of future work, rose 4% to $22.2 billion, and the company expects revenue to grow 3% to 6% this fiscal year in local currencies, with earnings per share of $14.39 to $14.81, up 6% to 9%.
At nearly $260 a share, Accenture trades at roughly 18 times the midpoint of this year’s earnings forecast, a modest price for a business that still grows and returns so much cash.
Still, the company is honest about the risk. In the same release, it warns that AI “could harm the company’s business, including by reducing demand for our services.” And the middle of its growth forecast, about 4.5%, would be slower than last year’s 5% in local currencies, a sign that clients haven’t rushed into big new AI projects yet.
The bottom line
The market and the jobs data are pointing in opposite directions, and one month of hiring doesn’t settle the debate. But if LPL is right that the next phase of AI is about putting it to work, today’s beaten-down consulting stocks could be the overlooked winners. Investors who want AI stocks beyond chipmakers may want to start with Accenture and watch whether its bookings keep climbing.
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Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Accenture Plc and EPAM Systems. The Motley Fool recommends Cognizant Technology Solutions and Gartner and recommends the following options: long January 2028 $260 calls on Accenture Plc and short January 2028 $280 calls on Accenture Plc. The Motley Fool has a disclosure policy.
