Twilio’s AI Boost Is a Double-Edged Sword

Twilio stock is on a run so incredible you’d think it was immune to the “SaaS apocalypse” plaguing enterprise software stocks. But investors are missing the bigger picture.

The company, which sells software tools to help firms communicate with their customers via text messaging, phone calls and emails, has seen its shares rocket 36% so far this year—in contrast to the 30% declines common to big software stocks. The rally is largely a result of the enthusiasm for its burgeoning voice AI business, which sells tools to companies for building and managing AI agents that can talk to customers on the phone. That business was one reason why Twilio’s revenue growth doubled last year to 14%.