BMO Capital raised its price target on Accenture PLC (NYSE: ACN) from $200 to $235 while maintaining a "Market Perform" rating. The firm believes the company's latest quarterly revenue and bookings both beat expectations, and its fiscal 2027 revenue guidance was broadly in line with forecasts, but questions about AI's long-term impact on the IT services industry have not disappeared.

Accenture's fourth-quarter bookings reached $22.2 billion, up 5% year over year in local currency, including 37 deals each worth more than $100 million. BMO believes these figures show that demand from large enterprise clients remains solid and provide some visibility into future revenue.

More importantly, AI-related demand is becoming broader. BMO noted that business between Accenture and its AI and data partners is increasing, and new projects have begun to extend into previously smaller areas such as AI security. This means AI is not just driving model deployment or data infrastructure projects, but also creating new demand for consulting, governance, security and implementation. For Accenture, this new work helps expand its addressable market and provides new revenue sources beyond traditional IT services.

However, BMO has not turned fully bullish on that basis. The firm believes that while AI brings Accenture new projects, it also helps clients improve productivity. As enterprises use AI to automate more development, testing, analytics and back-office processes, the labor and service hours needed to complete the same work may decline. This creates a key contradiction: whether AI will create enough new demand to offset the compression of traditional IT services work, or ultimately leave the entire industry needing fewer people and less project investment, still lacks a clear answer.

This is also the main reason BMO continues to maintain a "Market Perform" rating rather than upgrading to a more positive view.

By contrast, the market's view of Accenture's near-term fundamentals has improved markedly recently. RBC Capital raised its price target to $240, highlighting AI momentum and revenue visibility from multi-year large contracts; Truist lifted its price target to $220; Jefferies also raised its price target to $220 and said the latest quarterly performance weakened prior overly pessimistic judgments about the IT services industry.

BMO's price target increase essentially acknowledges that Accenture's recent operating performance is stronger than previously expected, but its stance remains more cautious than some peers. Therefore, BMO's current judgment on Accenture can be summarized as follows: in the short term, AI is increasing orders and expanding new service areas, with results and bookings stronger than expected; in the long term, AI may also allow clients to complete the same work with fewer resources, so whether it is a net increment for the IT services industry or ultimately compresses industry growth still needs more time to verify.