Analysts Mixed on Twilio Inc. (TWLO) as AI Voice Momentum Builds

Twilio Inc. (NYSE:TWLO) is among the best software infrastructure stocks to buy according to hedge funds. On January 5, Piper Sandler downgraded Twilio Inc. (NYSE:TWLO) to Neutral from Overweight while modestly raising its price target to $148 from $145.

The primary reason for the downgrade was the firm’s belief that Twilio’s recent growth re-acceleration narrative is likely to moderate later in 2026. It also sees limited scope for further upside revisions to free cash flow estimates. Piper Sandler believes the company has already met its previously targeted capital-return expectations and now trades at a “relatively fair valuation”.

The firm, however, maintains a constructive view of Twilio and regards it as its preferred name, given its strategic positioning in the communications software landscape, characterizing the company as the “best house in this neighbourhood.” Despite a more cautious rating stance, the firm highlighted Voice AI infrastructure as a small but rapidly growing segment of the business that could continue to drive growth.

Piper Sandler indicated it could turn more positive on the stock at a lower share price, with upcoming fourth-quarter results and initial 2026 guidance representing the next potential catalysts for reassessing the investment case.

Analysts from RBC Capital and Citizens JMP also raised their price targets on January 5 and December 30, respectively. Citizens JMP Securities analyst Patrick Walravens, who rates the stock an Outperform, raised the price target to $185, shy of the consensus high of $200, citing strong trends in the AI voice business.

Twilio Inc. (NYSE:TWLO) is a customer engagement platform that provides developers with tools to build, scale, and deploy real-time communications within software applications.

While we acknowledge the potential of TWLO 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.

READ NEXT: 7 Spin-Off Companies in 2025 and 11 Best Stocks You’ll Wish You Bought Sooner.

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