Harris Oakmark flags Accenture as top detractor amid AI valuation debate
The fund’s Q2 2026 letter highlights transitory booking weakness and a historic low price-to-earnings multiple, contrasting with market fears of structural disruption from artificial intelligence.
Harris Oakmark’s Oakmark Equity and Income Fund identified Accenture as its primary performance drag during the second quarter of 2026, citing a sharp decline in the professional services firm’s shares. The fund attributed the underperformance to weaker-than-expected bookings and a modest near-term revenue outlook following Accenture’s fiscal third-quarter results.
While the broader market interpreted these figures as evidence that artificial intelligence is disrupting Accenture’s traditional business model, Harris Oakmark argued that the weakness stems from transitory rather than structural factors. The fund expects revenue growth to accelerate as enterprises begin to execute larger-scale transformation projects tied to AI implementation.
Accenture’s shares have faced significant headwinds, losing 49.82% over the past 52 weeks and recording a one-month return of -16.31% leading up to mid-July. On July 13, 2026, the stock closed at $138.52, valuing the company at approximately $84.77 billion. The fund noted that shares were trading at less than 10 times free cash flow and at the lowest price-to-earnings multiple in the company’s 25-year history as a public entity.
Despite the recent volatility, Harris Oakmark pointed to the firm’s entrenched position in enterprise IT roadmaps as a stabilising factor. The fund highlighted that 195 of Accenture’s top 200 clients have maintained relationships with the firm for over a decade, with most spending more than $100 million annually. This deep client integration suggests resilience despite short-term booking fluctuations.
The Oakmark Equity and Income Fund’s equity portion generated a return of 6.84% for the quarter, underperforming the S&P 500 Index’s 15.20% return. The fund, which maintains a 60.1% allocation to equities, remains focused on owning undervalued companies rather than chasing popular market themes. In the first quarter of fiscal 2026, Accenture reported revenues of $18.7 billion, reflecting a 5% increase in local currency.
