Intuit Shares Tumble 24% Amid AI Anxiety: Market Overreaction or Sign of Slowing Growth?

Intuit Inc. (NASDAQ: INTU), the powerhouse behind QuickBooks and TurboTax, finds its shares under significant pressure in early 2026, down approximately 24% year-to-date. This decline comes despite the company reporting robust fiscal first-quarter earnings in November and standing by its full-year guidance.

The sell-off appears less about Intuit's specific performance and more reflective of a sector-wide reckoning. A broader market theme has taken hold, with investors aggressively rerating software stocks to lower valuation multiples. The pervasive fear is that the rise of artificial intelligence could upend established business models, making historically rich premiums seem unjustified.

Yet, a closer look at Intuit's numbers tells a more nuanced story. Q1 revenue hit $3.9 billion, an 18% year-over-year increase, while non-GAAP EPS surged 34% to $3.34. Its Credit Karma segment led with 27% growth, and the core Small Business & Self-Employed group, representing the bulk of revenue, grew 18%. However, growth did decelerate from the 20% pace seen in the prior quarter, and management's fiscal 2026 revenue guidance of 12-13% suggests a slower trajectory than fiscal 2025's 16% growth.

Analysts note that Intuit has a history of conservative forecasting. "The guidance range is identical to their initial outlook for fiscal 2025, which they ultimately exceeded," remarked Sarah Chen, a senior analyst at FinTech Insights. "The market may be reading too much into a typical, cautious projection."

Paradoxically, AI—the very source of investor anxiety—is currently acting as a growth engine for Intuit. The company has rolled out a suite of proactive AI agents across its platforms. CEO Sasan Goodarzi highlighted on the earnings call that 2.8 million customers are now using these agents, with the accounting agent saving users up to twelve hours monthly and the payments agent accelerating receivables by an average of five days.

"This isn't about AI replacing Intuit; it's about Intuit leveraging AI to deepen its competitive moat," explained Michael Rodriguez, a portfolio manager at Horizon Capital. "These tools increase switching costs and create new revenue streams, potentially driving higher customer lifetime value."

The current valuation, with a forward P/E around 22, presents a compelling entry point for some, considering the company's diversified portfolio, consistent profitability, and AI-driven initiatives. Risks remain, including potential disruption to the tax filing landscape and the possibility that AI could empower new competitors. However, proponents argue the steep year-to-date decline has largely priced in these concerns.

Market Voices: A Divided Street

David Park, Retail Investor: "I've used QuickBooks for my bakery for a decade. These new AI tools are a game-changer, saving me countless hours on bookkeeping. The sell-off feels like a knee-jerk reaction to a buzzword. I'm adding to my position on this weakness."

Linda Fitzgerald, Independent Financial Advisor: "The guidance slowdown is meaningful, even if conservative. In this macro environment, premium valuations for slowing growth are hard to justify. I'm advising clients to wait for clearer signs of re-acceleration or a more attractive valuation floor."

Robert "Buzz" Kellerman, Tech Blogger & Commentator: "This is the classic dinosaur moment! The market is finally waking up. Intuit's core tax business is a government-contracted gravy train that AI and regulatory change could derail overnight. A 24% drop is just the beginning. They're trying to put lipstick on a pig with these 'AI agents,' but real disruption comes from outside, not from automating old workflows."

Priya Sharma, CFA, University Finance Professor: "The emotional reaction to AI disruption is overshadowing fundamental analysis. Intuit possesses immense data networks and customer trust. Their AI integration is a defensive and offensive strategy, not an admission of weakness. The current price offers a favorable risk/reward for long-term investors willing to look past sector-wide volatility."

Disclosure: The Motley Fool holds positions in and recommends Intuit. This analysis is for informational purposes and is not investment advice.