Shares in government contractors Booz Allen Hamilton (BAH), Gartner (IT), CACI International (CACI) and Science Applications International (SAIC) 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 (PLTR) rose.
The DOD posted Hegseth’s announcement on Elon Musk’s X, formerly Twitter.
On the stock market Thursday, 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, led by Musk, for identifying DOD contracts that were no longer needed.
Musk In Pentagon Meeting Friday
According to reports, Hegseth will be meeting with Musk at the Pentagon on Friday to discuss “innovation, efficiencies & smarter production.” The defense agency is evaluating large civilian job cuts.
In a post on X, Hegseth said the meeting is not about China war plans as reported by the New York Times.
Further, Musk founded electric car maker Tesla (TSLA). Tesla stock has plunged 41% in 2025 amid Musk’s DOGE activity. In an all-hands company meeting late Thursday, Musk told employees to hold onto Tesla stock.
Worries over Accenture’s federal government services business amid DOGE-led layoffs of federal employees also hit Accenture (ACN), after the IT services company reported fiscal second quarter earnings.
Accenture stock tumbled along with IBM (IBM) and ServiceNow (NOW). Accenture stock fell 7.3% to 300.91.
DoD Consulting Contract Review
“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.
“Shares of many defense tech service providers are down following Accenture’s commentary that DOGE is inducing a slower government procurement environment, which is impacting revenue for its Accenture federal business,” said William Blair analyst Louie DiPalma in a report.
He added: “While some small contracts have been canceled for the main players, most cancellations have been for small vendors. There will likely be greater clarity over the next three months following the review of GSA and non-GSA DoD consulting contracts. Slower bookings have the potential to result in revenue deceleration over time.”
Booz Allen Stock: Palantir Partnership
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 15% in 2025 but has dropped some 30% from its all-time high set in February.
