Shares in government contractors Booz Allen Hamilton, Gartner, CACI International and Science Applications International tumbled on Thursday after Secretary of Defense Pete Hegseth said the Pentagon was canceling $580 million in contracts, including deals with Gartner and consultancy McKinsey. While Booz Allen stock fell, shares in rival Palantir Technologies rose.
The DOD posted Hegseth's announcement on Elon Musk's X, formerly Twitter.
On the stock market today, Booz Allen stock retreated 8.1% to close at 103.58. Gartner stock 6.8% to 418.77. CACI stock was down 4.5% at 369.66. SAIC dipped 6% to 105.98. But Palantir stock rose 1.5% to 87.39.
Further, Hegseth credited the Trump administration's DOGE initiative for identifying DOD contracts that were no longer needed.
Worries over Accenture's federal government services business amid DOGE-led layoffs of federal employees also hit Accenture, after the IT services company reported fiscal second quarter earnings.
Accenture stock tumbled along with IBM and ServiceNow. Accenture stock fell 7.3% to 300.91.
Booz Allen Stock: Palantir Partnership
"The new administration has a clear goal to run the federal government more efficiently," said Accenture Chief Executive Julie Sweet on the company's conference call with Wall Street analysts. "During this process, many new procurement actions have slowed, which is negatively impacting our sales and revenue."
In 2024, the U.S. federal government accounted for 8% of Accenture revenue.
While they are rivals, Palantir and Booz Allen announced in December that they would partner in some cases. The two companies said the partnership will focus on "driving transformational information infrastructure modernization and secure interoperability and rapidly accelerating integrated warfighting operations with coalition partners through data-centric systems that improve collaboration and combined mission planning with U.S. allies and partners."
Palantir stock has climbed 16% in 2025 but has dropped some 30% from its all-time high set in February.
Follow Reinhardt Krause on X, formerly Twitter, @reinhardtk_tech for updates on artificial intelligence, cybersecurity and cloud computing.
