Accenture PLC (NYSE: ACN) saw its shares plummet 9.07% in early trading on Thursday following the release of its fiscal second-quarter results and updated guidance. The sharp decline reflects investor concerns over slowing growth, potential federal contract losses, and the impact of changing market dynamics on the consulting giant.

While Accenture's Q2 revenue of $16.7 billion slightly exceeded analyst expectations, earnings per share of $2.82 narrowly missed the consensus estimate of $2.84. More concerning for investors was the company's decision to narrow its full-year revenue growth forecast to 5-7% from the previous 4-7% range, suggesting potential headwinds in the coming quarters.

Adding to the negative sentiment, Accenture reported a 3% year-over-year decrease in new bookings, which totaled $20.9 billion for the quarter. This decline raises questions about the company's ability to maintain its growth trajectory in an increasingly competitive market. However, the company did highlight a bright spot in its generative AI business, reporting $1.4 billion in new bookings for this emerging technology sector.

During the earnings call, Accenture executives revealed additional challenges that likely contributed to the stock's sharp decline. The company noted that many new procurement actions have slowed, negatively impacting sales and revenue. Furthermore, management disclosed that the General Services Administration had issued guidance to terminate contracts not deemed mission-critical, potentially putting a portion of Accenture's federal business at risk.