PagerDuty (PD): Truist Cites AI Narratives, Terminal Value Concerns as Key Drivers for Infrastructure Software

PagerDuty Inc. (NYSE:PD) is one of the best single digit stocks to buy according to analysts. On February 5, Truist lowered its price target for PagerDuty from $16 to $12 while maintaining a Buy rating. This decision was made as part of the firm’s broader research note on infrastructure software. The firm noted that the sector’s decline is primarily driven by concerns over terminal value rather than near-term fundamentals, making AI narratives increasingly critical for investors.

According to the firm, vendors with seat-based models underperformed throughout 2025 and early 2026, leading Truist to conclude that gaining traction in AI use cases and shifting away from seat-based deployments are now strategic imperatives for these companies.

In Q3 2025, PagerDuty Inc. (NYSE:PD) reported revenue of $125 million, which is a 5% year-over-year increase. This growth was supported by double-digit increases in new customer acquisitions across a diverse mix of AI-native and traditional industries. Management highlighted a strengthening product advantage in AI operations and incident management, though they noted that platform usage continues to rise even as some seat counts are consolidated.

PagerDuty Inc. (NYSE:PD) operates a digital operations management platform. The company’s digital operations management platform collects data and digital signals from virtually any software-enabled system or device and uses ML to correlate, process, and predict opportunities and incidents.

While we acknowledge the potential of PD 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.