Twilio Inc. (NYSE:TWLO) rose another 3.1% on September 24 to close at $299.66. The run has come alongside a series of analyst upgrades. TD Cowen lifted its target to $300 from $260, and Rosenblatt, Wells Fargo and UBS all raised theirs in the same stretch.
The stock has roughly tripled from its low of $98.44 over the past year, which is not a move anyone expected from a company the market had written off as a commodity messaging pipe.
The argument driving it is simple. Every AI assistant that texts you, calls you, or messages you on WhatsApp has to send that message through somebody.
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Twilio Gets Paid Whoever Wins the AI Race:
TD Cowen analyst Derrick Wood put the case plainly. Consumer-facing AI assistants should push up the volume of messages, voice calls, and WhatsApp traffic, and Twilio is the infrastructure underneath a large share of it.
That is a useful position. Twilio does not need to pick which assistant succeeds, because it charges for the delivery rather than the intelligence. A chatbot that confirms your appointment is billable traffic regardless of which company built it.
The numbers have started to reflect it. Second quarter revenue reached $1.50 billion, up 22% from a year earlier and ahead of what analysts expected, with earnings also beating. Strip out the pass-through fees Twilio collects for American carriers and the underlying growth was closer to 17%.
Management has been deliberate about the mix, pushing into higher margin products rather than chasing volume at any price. Twilio has also been finding traction in newer markets, including Latin America.
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What the Headline Numbers Leave Out:
A stock that has tripled in a year brings a different set of questions with it.
Twilio’s reported earnings also need care. Profit over the past twelve months was lifted by a large one-off tax item that will not repeat. That is why the multiple on next year’s expected earnings is actually higher than the one on the past year.
Analysts are sending a mixed message as well. They have been raising targets, but the average of those targets now sits below where the stock already trades. The upgrades caught up with the price rather than getting ahead of it. Management has also guided third-quarter organic growth down to 11% to 12%, slower than the quarter just reported.
There is a strategic question too. Being the pipe is a good place to stand while volumes grow, but pipes rarely capture the value of what flows through them. If AI assistants consolidate around a few large platforms, those platforms gain the leverage to negotiate.
Conclusion:
Twilio has gone from a discarded messaging business to one of the year’s strongest performers, and the second quarter put real revenue growth behind the story. However, the shares have tripled in a year, the trailing earnings figure includes a one-off that will not repeat, and analyst targets now sit below the market price. The number to watch is organic revenue growth when Twilio reports on October 29. That is the figure that shows whether AI traffic is actually reaching the network.
Market Sentiment:
Twilio Inc. was held by 72 hedge funds with a combined stake value of about $3.5 billion at the end of Q2 2026 in the Insider Monkey database. This is up from 64 hedge fund holders with a cumulative investment value of around $2.8 billion in the previous quarter.
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This article is originally published at Insider Monkey.
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