Twilio's Long-Term AI Upside Seen Limited as Gains Prove Volume-Driven, RBC Says
Twilio (TWLO) is unlikely to see durable long-term benefits from generative AI, even as the company positions itself as a key infrastructure provider for the emerging agentic AI era, RBC Capital Markets said Wednesday in a report.Twilio's AI gains will be fleeting because they stem from messaging volume rather than the high-margin software leverage that creates durable AI winners, RBC said.Twilio may see some near-term lift from higher messaging volumes if customers build chat experiences over text, and the company is leaning into its customer data and communication channels to support agentic AI workloads, though management said the opportunity remains in its early stages, according to the report.Multi-product adoption is also a potential growth driver, with Twilio's redesigned Console making it easier for customers to discover and test combinations such as voice, email, and messaging, the report said.RBC maintained its underperform rating on Twilio, citing concerns on long-term margins and competition. The price target held at $120.Price: $197.60, Change: $+6.20, Percent Change: +3.24%