Key Takeaways:
Bank of America issued a rare double-upgrade on Twilio Inc. (NYSE: TWLO), raising its rating to ‘Buy’ from ‘Underperform’ and lifting its price target to $190 from $110, citing an improved outlook for AI-driven communications growth.
"We see positive inflections in its strategic positioning in AI and its fundamentals," Bank of America analyst Koji Ikeda said in a note. "Twilio will prove to be one of the key infrastructure layers for AI-driven voice and messaging uses cases, where scale and reliability are critical."
The upgrade moved BofA’s rating past ‘Neutral’ in a single step. The new $190 price target, one of the highest on Wall Street, implies roughly 27% upside from Twilio's recent price of $149.90. The firm forecasts Twilio’s gross profit growth will accelerate to 10% annually by fiscal 2028.
The bullish call adds to growing analyst conviction in Twilio's AI strategy, with Jefferies, Truist, and Mizuho also holding Buy ratings. BofA believes concerns about AI disrupting Twilio are misplaced, arguing its telecom network integration and partnerships with AI startups like Sierra and ElevenLabs create a significant competitive moat.
BofA’s thesis centers on Twilio’s platform becoming the foundational infrastructure for a new wave of autonomous agents and AI-powered customer service tools. The bank highlighted products like ConversationRelay, for generating human-like speech, and Conversational Intelligence, which offers AI-based transcription and analysis.
The upgrade follows a strong 2025 fiscal year for Twilio, where it posted revenue of $5.067 billion, up 14 percent year-over-year, and returned to annual profitability. The company generated $945.43 million in free cash flow, a 44 percent increase from the prior year.
Not all analysts are as bullish. A recent report from Seeking Alpha author Tyler Wiedwald rated the stock a ‘Hold’ with a $160 target, noting the company is transitioning to a more mature, moderate-growth phase and that high-margin AI products are still too small to significantly impact overall margins.
The upgrade provides a strong counter-narrative to bears, suggesting Twilio is a primary beneficiary, not a victim, of the AI boom. Investors will watch for further details on AI product traction during the company's upcoming "Signal" customer event in May.
This article is for informational purposes only and does not constitute investment advice.
