UiPath

UiPath (PATH 1.18%) finally gave the market something to get excited about. The stock popped after the company laid out a series of new collaborations with Nvidia, Alphabet, Snowflake, and OpenAI. For a business that has been slogging through a multiyear turnaround, this was great news, as it shows a company ready to play a central role in how enterprises actually use artificial intelligence (AI).

Going down a new path

UiPath is no longer trying to be just a robotic process automation (RPA) company that uses software bots to automate rule-based tasks such as data entry. Instead, it is shifting to agentic automation, where its AI agent orchestration platform can coordinate how humans, bots, and different AI agents all work together. These new partnerships are about pushing that vision into the real world.

Image source: Getty Images

The deal with Nvidia focuses on industries that have little room for error. UiPath will use Nvidia’s Nemotron models and NIM microservices to power agents that can run on-premises in regulated environments like healthcare and fraud detection, where data can’t leave secure systems. Meanwhile, it will bring Alphabet’s Gemini models into its platform, so people can use automation with voice commands.

In addition, by linking up with Snowflake, it will tie Snowflake’s Cortex AI to its orchestration platform to help customers act on data insights in real time. And finally, its OpenAI partnership adds a ChatGPT connector that lets customers weave advanced large language models (LLMs) right into their workflows without rebuilding everything from scratch.

When you look at these moves together, UiPath is trying to position itself as the Switzerland of enterprise AI agents: integrating with everyone and letting customers pick whichever models they want without locking themselves into a single vendor. That pitch resonates because companies are wary of vendor lock-in, and having one orchestration platform that can handle all these AI agents could become a valuable advantage. The collaboration with Snowflake looks particularly compelling because the combination should be able to offer an alternative approach to Palantir that can deliver similar data-driven automation and real-world insights using a customer’s data that is already warehoused inside Snowflake servers.

Meanwhile, even before announcing these partnerships, UiPath was already seeing early signs that its turnaround was starting to take hold.

In its most recent quarter, the company’s annual recurring revenue (ARR) climbed 11% to $1.72 billion, beating the high end of guidance. Cloud ARR jumped 25% to cross the $1 billion mark, proving that the migration to the cloud is moving along. Net revenue retention stabilized at 108% after several quarters of slippage, which is important because it suggests existing customers are still spending more. Its public sector business, which had been frozen earlier in the year, is starting to come back, and adjusted operating margins jumped to 17% as the company’s past cost cuts and restructuring efforts began to show up in its numbers.

Is the stock a buy?

While UiPath still has plenty to prove, there are other encouraging signs. The return of founder Daniel Dines as CEO has given the company a steadier hand and clearer focus on its agentic automation vision. More than 450 customers are already building AI agents on its platform, and 95% of new customers are adopting its core automation products too, suggesting the new AI tools are complementing rather than replacing its traditional offerings.

Trading at a forward price-to-sales (P/S) ratio of roughly 4.1 times expected 2026 revenue, the stock’s valuation is inexpensive for a business with improving fundamentals. If these partnerships can further help accelerate growth, UiPath’s stock could have plenty of upside ahead.

That said, this is not a low-risk story, and there will likely be bumps along the way. However, for investors willing to bet on a company that looks like it is getting its act together and has some powerful partners lined up, the stock looks like an interesting buy.

Shares of UiPath (PATH 10.83%) rallied on Monday, with shares up 10.5% as of 3 p.m. ET.

UiPAth received a positive sell-side analyst note today, and was discussed extensively on Reddit message board Wall Street Bets (WSB) over the weekend. The combination sent UiPath shares rising, given that shares still trade some 85% below their 2021 all-time high.

Truist gives a thumbs-up, but WSB takes it from there

On Monday, Truist Financial analyst Terry Tillman wrote a note saying he came away “increasingly confident” in UiPath being able to meet or exceed its full-year outlook given on its recent earnings release, following a meeting last week with the company’s CFO, chief operating officer, and investor relations team. That being said, Tillman didn’t change his price target on the stock, leaving it at $12 per share and giving UiPath a hold rating.

While the commentary on full-year guidance is nice, the note by itself probably wasn’t enough to get the stock moving as much as it did today. Likely, the extra boost was provided by meme stock traders on the Reddit message board Wall Street Bets. Mentions of UiPath have increased recently, with one WSB monitor citing a 500% increase in mentions for the stock over the weekend. That likely came when one popular WSB Redditor posted Friday that his next big stock bet is UiPath. If other message board traders follow this poster’s bet, that could be spurring buying and short covering action on Monday.

Image source: Getty Images.

Do your own due diligence

UiPath is still down hugely from its 2021 highs, so if it can harness the power of AI to boost its automation software, the stock could stage a comeback. However, AI also has the potential to raise competition for UiPath, given that a number of AI companies, from the “Magnificent Seven” to OpenAI, are all looking to serve enterprises with AI automation tools.

That being said, that competitive threat has made UiPath trade rather cheaply for a software company, at just 4.3 times sales and 18 times next year’s adjusted earnings estimates.