Fiduciary Management Inc, an investment counsel, has released its investor letter for the fourth quarter of 2025. The firm reported solid long-term performance but acknowledged lagging broader market indices during a period of speculative, AI-driven gains.
Equity markets saw strong advances in 2025, driven by risk-seeking behavior and heavy concentration in a narrow group of AI-related stocks, even with valuations at historically high levels. The letter noted that quality-focused and value-oriented investment strategies underperformed, particularly among smaller companies, as lower-quality and high-volatility stocks led returns.
While recognizing the long-term potential of artificial intelligence, the firm expressed concern over excessive capital spending, stretched valuations, and rising capital intensity. It emphasized maintaining discipline, protecting against downside risks, and sticking to its quality-value approach as signs of a potential market bubble continue to appear.
Regarding Accenture plc, the letter stated that recent share price weakness reflects near-term worries about enterprise IT spending and uncertainty around AI, rather than a fundamental deterioration of the business. The fund highlighted Accenture's resilient cash flows, diversified revenue sources, and long-term earnings durability as digital and AI adoption accelerates.
Accenture's stock returned approximately +5.74% over one month but lost about -18.83% of its value over the past 52 weeks. On January 16, 2026, Accenture shares closed at around $286.21 each, giving the company a market capitalization of about $176.11 billion.
In the letter, Fiduciary Management Inc stated: "Accenture plc is the world's leading IT consultant, with advantages stemming from their depth and breadth across products, geographies, and industries. Their revenue is split roughly in half between IT consulting and managed services. Over the last four years, Accenture's valuation has roughly halved. They've faced headwinds in IT spending and suffered from the perception that they are an AI loser. We believe that AI will cause deflationary pressure in parts of their business, but that it will be more than offset by the work required for enterprises to adopt AI. This is recently evidenced by partnerships with OpenAI and Anthropic. The AI supplier landscape is increasingly fragmented, and corporate customers need significant help adopting these technologies at scale. We believe this will drive AI suppliers and customers into Accenture's arms. The current cyclical pressures are being attributed to structural issues, which we believe is incorrect, creating an attractive long-term set-up."