Morgan Stanley Upgrades UiPath (PATH) Following Strong FQ3 2026 Earnings Beat and Profitability Milestone

UiPath Inc. (NYSE:PATH) is one of the AI stocks under $20 to buy now. On December 9, Morgan Stanley analyst Sanjit Singh raised the firm’s price target on UiPath to $19 from $15 with an Equal Weight rating on the shares. This sentiment was posted after the firm adjusted estimates and valuations among its software coverage, which followed the company’s strong FQ3 2026 earnings report.

In FQ3, UiPath Inc. (NYSE:PATH) reached a historic milestone by reporting its first-ever GAAP profitable third quarter, with a GAAP operating income of $13 million. Total revenue grew 16% year-over-year to $411 million, exceeding the high end of its previous guidance. The company’s ARR reached $1.78 billion, which was an 11% increase from the prior year, supported by $59 million in net new ARR during the quarter. Customer retention remained high, with a dollar-based gross retention rate of 98% and a net retention rate of 107%.

UiPath continues to transition from traditional Robotic Process Automation/RPA toward an Agentic AI platform. The company highlighted new technology integrations with OpenAI, Microsoft, NVIDIA, Google, and Snowflake. A key development is the integration with Microsoft Azure AI Foundry and a new collaboration with OpenAI to build a ChatGPT connector for enterprise workflows. These initiatives are designed to help customers orchestrate complex multi-agent systems. Industry recognition supported this strategy, as Gartner named UiPath a leader in both Intelligent Document Processing and AI-augmented software testing.

For FQ4 2026, UiPath expects revenue to range between $462 and $467 million, despite an estimated $3 million headwind from currency fluctuations. ARR is projected to reach between $1.844 and $1.849 billion by January 31, 2026.

UiPath Inc. (NYSE:PATH) provides an end-to-end automation platform that offers a range of robotic process automation/RPA solutions primarily in the US, Romania, the UK, the Netherlands, and internationally. Its platform comes embedded with AI, ML, and NLP capabilities.

While we acknowledge the potential of PATH as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.