Bull of the Day: Intuit Inc. (INTU)

Intuit Inc. (INTU) stock soared to all-time highs after the TurboTax owner posted a big beat-and-raise quarter on May 22, boosted by its expanding artificial intelligence efforts.

The technology giant finally broke out of the trading range it had been stuck in since late 2021. Wall Street is increasingly convinced that Intuit’s expanding portfolio and AI enhancements will help it keep churning out double-digit sales and earnings growth.

Intuit stock has crushed the Tech sector and software standouts such as Microsoft over the past 20 years.

The recent surge and breakout should put the mega-cap tech stock back on Wall Street’s radar for more near-term upside and continued long-term outperformance.   

Intuit: Buy This AI-Enhanced Tech Stock and Hold Forever

Intuit is one of the biggest players in a corner of the economy that’s never going out of style, because there are only two certainties in life: death and taxes. The company’s ability to consistently improve and expand its TurboTax software transformed INTU into a technology powerhouse.

The company’s essential, timeless software offerings have helped it post consistent top-line expansion that's impressive even among its mega-cap tech peers like Microsoft, Apple, and Alphabet.

INTU averaged 16% revenue growth over the last decade, alongside roughly 15% average GAAP earnings expansion.

Intuit expanded its software portfolio far beyond TurboTax to become a one-stop shop for business and consumer finance, email marketing, and more via Credit Karma, QuickBooks, and Mailchimp.

The tech standout boasts roughly 100 million customers across its various businesses. Most importantly, it’s ready to fight off any potential new-age challengers by going all in on artificial intelligence.

Intuit last summer cemented its AI efforts as it attempts to roll out the next-generation tech into every pocket of its business.

INTU said last July that would cut 1,800 jobs (10% of its workforce) and hire roughly 1,800 new people “primarily in engineering, product, and customer-facing roles” to pursue AI-driven expansion to make sure its ready to thrive in the AI-everything age.

Intuit's Blockbuster, AI-Boosted Quarter and Growth Outlook  

Intuit posted beat-and-raise third quarter fiscal 2025 results (period ended on April 30) on May 22. Its revenue climbed 15% to help boost its adjusted earnings by 18% and improve its GAAP EPS by 19%.

Digging deeper, the firm expanded its Consumer Group revenue by 11%, Global Business Solutions Group sales by 19%, and Credit Karma revenue by 31%.

Intuit’s AI-powered TurboTax Live is an assisted tax preparation service that combines human experts with automation. The segment saw its revenue skyrocket 47% to $2 billion, representing 40% of total Consumer Group revenue.

The massive growth reflects rising consumer demand for hybrid tax solutions, where AI streamlines processes (data entry, calculations, and more) and human experts provide personalized guidance. The offering appeals to users looking for convenience over traditional in-person services offered by the likes of H&R Block and CPAs.

AI-powered innovations and personalized offerings spurred growth across the portfolio. “We're redefining what's possible with AI by becoming a one-stop shop of AI-agents and AI-enabled human experts to fuel the success of consumers and small and mid-market businesses,” CEO Sasan Goodarzi said in prepared remarks.

“We had an outstanding year in tax, including a significant acceleration in TurboTax Live revenue growth as we disrupt the assisted tax category.”

INTU is projected to boost its revenue by 15% in FY25 (up from its previous 12% guidance) and expand sales by 12% in FY26 to $20.96 billion.

The company is expected to boost its adjusted earnings by 18% in fiscal 2025, up from the 13% outlook before its recent release, and then post 14% growth next year.

INTU’s upbeat earnings outlook earns it a Zacks Rank #1 (Strong Buy), and it has topped our bottom-line estimates in 19 out of the past 20 quarters. 

Traders and Investors Should Buy this Tech Stock

Intuit tanked in 2022 alongside the market and growth-heavy tech stocks as higher interest rates made its valuation levels harder to swallow. Wall Street was also worried about how AI might disrupt the tax industry.

INTU has flipped the narrative on the AI front, and Wall Street remains willing to pay a premium for Intuit because it's growing its earnings in a segment of the economy that’s never going out of style.

Intuit climbed over 3,300% in the past 20 years to more than quadruple Tech’s 725% and double Microsoft’s (MSFT) 1,600%. The huge outperformance includes its 80% surge in the past three years and 20% run in 2025, boosted by its post-earnings release surge.

Intuit finally broke out meaningfully above its 2021 highs after meeting resistance there throughout 2024.

The stock is looking a bit overheated in terms of RSI levels, as are a ton of stocks that have skyrocketed off the market’s April lows.

Intuit's strong earnings growth outlook helps it trade at a 40% discount to its highs with a 3.3 price/earnings to growth (PEG) ratio. This is worth stressing since INTU’s stock price just hit a new record.

Traders and long-term investors might want to wait for a pullback before they buy INTU stock.

But market timing is difficult, and there’s no telling when Intuit might fade since strong stocks that break out of a prolonged holding pattern tend to surge longer than many assume. 

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This article originally published on Zacks Investment Research (zacks.com).

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