UiPath: A Beaten-Down Leader in the Next Wave of AI Poised for a Turnaround

Shares of automation software firm UiPath (NYSE: PATH), once a high-flying market darling, have tumbled more than 80% from their peak. Yet beneath the surface, the company is quietly establishing itself as a frontrunner in what industry analysts call the next frontier: agentic artificial intelligence.

Unlike conventional chatbots that respond to prompts, agentic AI systems are designed to execute multi-step tasks and processes autonomously. UiPath's platform, which orchestrates over 365,000 automated processes for hundreds of enterprise clients, is a foundational technology for this shift. The company reports a striking 98% gross retention rate, indicating deep embeddedness in customer operations.

"The narrative has shifted from simple cost-cutting to strategic transformation," said a tech sector analyst who requested anonymity. "UiPath's platform is evolving from a robotic process automation (RPA) tool into an intelligent orchestration layer. That's the core of the agentic AI thesis."

Financially, the company is showing signs of stabilization. It posted an adjusted operating margin of 21% in its last quarter, a significant improvement that suggests a path to sustainable profitability. With Wall Street projecting annualized earnings growth of approximately 26% for the coming years, the stock's current valuation of around 21 times estimated 2026 earnings appears conservative to some investors—if the growth materializes.

The potential market is substantial. Research firm Mordor Intelligence forecasts the agentic AI sector will balloon from roughly $10 billion in 2026 to $57 billion by 2031, as businesses seek to automate increasingly complex knowledge work.

Investor Perspectives:

• Maya Chen, Portfolio Manager at Horizon Growth Fund: "This is a classic 'falling knife' that's finally finding a handle. The retention metrics are phenomenal, and they're already monetizing the AI transition. It's not a speculative bet; it's an established vendor trading at a growth discount."
• David R. Miller, Independent Investor & Former Software Engineer: "The hype cycle giveth, and the hype cycle taketh away. PATH got crushed when the market realized RPA alone wasn't magic. Now they're rebranding with 'agentic AI.' I need to see genuine new customer acquisition, not just the same clients sticking around. The financial engineering of 'adjusted' profits doesn't impress me."
• Arjun Patel, Tech Analyst at Clearwater Research: "The risk-reward is intriguing. The downside from here may be limited if margins hold, but the upside is tied to a market that's still in its infancy. They have a first-mover advantage in process orchestration, which could be pivotal."

Disclosure: The Motley Fool holds positions in and recommends UiPath.