When chipmaker Nvidia announces its partnerships in the realm of artificial intelligence (AI), it often holds significant implications for investors. With a significant portion of servers built for AI relying on Nvidia GPUs, the company possesses extensive insights into the computing space. During Nvidia's Q3 conference call, one particular partnership came to the forefront - with Accenture, the largest tech consulting firm globally.

Accenture's Army of AI Experts

Nvidia's CFO, Colette Kress, highlighted during the conference call that Accenture had established a new unit comprising 30,000 employees trained on Nvidia's AI technology. This positions Accenture as one of the most well-prepared companies to offer AI expertise to clients who may lack in-house capabilities. While tech giants like Alphabet and Microsoft have extensive teams dedicated to this technology, many other sectors such as banking, industrial, and oil are less likely to have such internal resources. Hence, they turn to consulting firms like Accenture.Accenture's CEO, Julie Sweet, emphasized the significance of generative AI in every industry. She stated, "In every industry, there is a challenge or opportunity that GenAI can now uniquely solve. Our deep understanding of both the industry and the technology positions us to be the best at creating real value from GenAI with our clients." This perfectly encapsulates Accenture's AI-related investment thesis, as it is set to benefit from the mainstream adoption of generative AI in the coming years. However, it is a vast consulting firm with multiple areas of specialization and expertise and is not solely an AI-focused entity.

The Impact on Business and Investments

In its fiscal 2024 fourth quarter ending on August 31, Accenture witnessed new bookings of $20.1 billion, with generative AI contributing $1 billion. While generative AI has clearly provided a boost to the business, it only accounted for 5% of the total bookings, making it a relatively minor aspect of the overall investment picture. Fiscal 2024 was not the most prosperous year for Accenture as clients were cautious with their spending. Revenue increased by just 3% in the fourth quarter and only 1% for the entire year. The outlook for fiscal 2025 is slightly more optimistic, with management expecting revenue to grow by 3% to 6% in local currencies. Given that many AI companies are experiencing much faster revenue growth, the question arises: Is Accenture a worthy investment?From a forward price-to-earnings perspective, Accenture's stock appears quite expensive. Shares are trading at around 28 times forward earnings, similar to Meta Platforms and Taiwan Semiconductor, which are growing at a much faster rate. So, what makes Accenture a better stock pick?One advantage for investors is Accenture's generous shareholder capital return program. It increased its dividend by 15% in the fourth quarter, and at the current share price, it offers a yield of about 1.6%. Additionally, it repurchases a significant amount of stock - $4.5 billion worth last year alone. Reducing the outstanding share count enhances its earnings per share, which are expected to increase between 5% and 8% in fiscal 2025.However, even with the dividend and stock buyback program, Accenture's stock seems a bit overvalued for my taste, especially when there are other AI companies growing at a much faster pace and trading at similar or lower valuations. Therefore, I am currently inclined to avoid investing in it.