Can Upwork Maintain Its Comeback? Reasons to Be Bullish and Bearish

Traders might fondly remember the meme-stock era of 2021, but the companies involved have a more mixed response. Most (if not all) meme stocks have never come close to their 2021 highs and currently reside in the market's dustbin.

One of those former high-flyers is Upwork Inc. (NASDAQ: UPWK), the online gig marketplace that went public in 2018. Upwork appeared to be in danger of penny stock status before COVID-19 struck, and shares soared from $6 to $58 over 18 months. 

Of course, UPWK was back under $10 a share shortly after the Fed started raising rates, and the whole run seemed like a fever dream.

But now Upwork is once again soaring, and this time the 30% gain is boosted by more than just free money.

Can the stock sustain this momentum as we enter 2026? We’ve got three reasons to believe, and two to remain skeptical.

3 Reasons to be Bullish on UPWK in 2026

If Upwork continues to ascend, 2025 may be remembered as the year the company became a mature tech sector enterprise. Revenue has been growing, and the company has embraced AI, signaling long-term adaptability. There are fundamental and technical tailwinds behind the surge this time, including these three factors.

1. Revenue Growth Becoming Profitable 

It’s one thing to grow top-line sales, but eventually sales need to become profits, particularly after seven years as a publicly traded entity. Upwork has begun turning its sales into profits and is showing growth across several key areas. Not only has the company been beating top and bottom-line earnings expectations, but margins have reached record levels (29.6%), and the all-important Gross Services Volume (GSV) metric once again returned to growth in Q3 2025 at 2% year-over-year (YOY). During the Q3 conference call, Upwork raised full-year revenue and EBITDA guidance projections and touted its AI advances, which leads us to our next factor.

2. Successfully Mitigating AI Headwinds

Many analysts and investors expected generative AI to be a killshot for freelance job boards like Upwork, where many tasks are one-off gigs that companies theoretically could source from ChatGPT or Gemini. However, instead of siphoning off clients, Upwork opened its arms to AI for hybrid workflows. Companies can now hire human freelancers and specialized AI agents for complex projects, and AI-based GSV has grown more than 50% YOY. The company also introduced UMA, its “work companion,” to help freelancers and clients find each other more efficiently.

3. Technical Trends Point to More Upside

Strong fundamentals can take time to materialize in a stock price if technical tailwinds aren’t also in place. But this stock has the combination of record sales, margin growth, and promising technical trends. Upwork shares sent some mixed signals to investors when the price dropped despite a Golden Cross forming on the 50-day and 200-day simple moving averages (SMAs).

The Golden Cross wasn’t wrong though, just early. The 50-day SMA wobbled but held as support, and the stock quickly broke back above the 2025 high it notched in September. The Relative Strength Index (RSI) is elevated but still below the Overbought threshold of 70, suggesting more upside to come.

2 Reasons to be Bearish on UPWK in 2026

2025 performance aside, investors are most interested in what’s going to happen in 2026. For those interested in a position in UPWK, here are two factors to watch. 

1. Shrinking Gig Volume Is a Red Flag

AI has been a boon to Upwork’s overall revenue growth, but it's also created a few cracks in the foundation. GSV is growing, but smaller jobs paying $300 or less are quickly evaporating as companies turn to generative AI rather than one-time freelancers to avoid onboarding.

If Upwork cedes these smaller gigs to AI or competitors like Fiverr International Ltd. (NYSE: FVRR), the marketplace could resume shrinking in terms of GSV—even if higher-level jobs remain plentiful.

2. Broader Labor Market Weakness

Right now, the macro picture for Upwork is stable. The Federal Reserve lowered rates again this month, and low rates often benefit small-cap stocks with real cash flow and reasonable valuations. But the labor market is the canary in Upwork’s coal mine, and the company’s Enterprise segment (which serves large professional clients) has already shown weakness this year.

Additionally, the company’s new Lifted platform for Enterprise clients is expected to entail substantial integration costs, which could knock 2% off the company’s margins in 2026. Margin stagnation combined with a job market slowdown, or even recession, would certainly reverse Upwork’s profit growth and likely take the stock down with it. 

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