Twilio Inc

Twilio raised its 2026 revenue growth outlook to 18% to 18.5%, up from a prior forecast of 14% to 15%, and reported record quarterly revenue of $1.50 billion for the second quarter, a 22% year-over-year increase. The company's organic growth reached 17%, well above the 9.5% to 10.5% full-year organic outlook given three months earlier, and its dollar-based net expansion rate improved to 116% from 108% a year ago. Non-GAAP operating income rose 29% to $285 million, while free cash flow hit $353 million, though most of the $1.07 billion in GAAP net income came from a one-time tax benefit. Shares surged about 25% on Friday to close at $241.28, giving the company a market value of roughly $36.6 billion, or about 32 times its raised free cash flow outlook.

Palantir Technologies stock surged as much as 9.9% on Friday, extending a rally that began after the company reported its 12th consecutive quarter of accelerating revenue growth. The data-mining and AI specialist's second-quarter revenue of $1.94 billion rose 93% year-over-year, its highest ever growth rate, driving adjusted earnings per share up 156% to $0.41. The broader software sector also got a boost as several enterprise software companies, including Twilio, reported better-than-expected results, easing fears that AI would decimate the software business. Twilio's stock jumped as much as 31% after it posted record profits and cash flow, helping convince investors that AI won't immediately displace enterprise software. Palantir's triple-digit profit growth helps justify its valuation at 74 times next year's expected earnings.

Atlassian surged 34%, Twilio jumped 27%, and Cloudflare gained 9% after each delivered strong quarterly results and raised their growth outlooks. Bank of America upgraded Atlassian to Buy and raised its target to $175, calling the company's workflow and collaboration data an increasingly valuable AI asset. Goldman Sachs raised Cloudflare's price target to $389, citing agentic AI adoption, 36% revenue growth, and record large-customer net additions. Jefferies raised its Atlassian target to $200, while Wells Fargo raised its Twilio target to $275, reflecting broad analyst optimism across the software sector.

Several companies made significant premarket moves following their latest earnings reports. Atlassian shares jumped more than 29% after beating FactSet consensus on revenue and guidance for its fourth quarter, though its 13% year-over-year revenue growth forecast fell short of the 13.4% expectation. Wendy's dropped 2% as global sales declined more than 6%, driven by an 8.2% U.S. decline, and the company withdrew its 2026 financial outlook despite beating FactSet consensus on earnings, revenue, and adjusted EBITDA. Solar stocks rose after President Trump imposed tariffs on imported solar panel components, with First Solar up more than 5%, Invesco Solar ETF up nearly 3%, and SolarEdge Technologies up 2%. Airbnb surged nearly 7% after posting second-quarter earnings of $1.37 per share on revenue of $3.61 billion, exceeding LSEG estimates of $1.25 per share and $3.58 billion. Twilio soared more than 17% as it guided for adjusted earnings of $1.42 to $1.47 per share on revenue of $1.51 billion to $1.52 billion, above the $1.39 per share and $1.46 billion consensus, and raised its full-year revenue growth outlook to 18% to 18.5% from 14% to 15%, topping the 14.8% forecast. Trade Desk tumbled 27% after second-quarter adjusted earnings of 34 cents per share on revenue of $715 million missed LSEG estimates of 40 cents and $751 million. Cloudflare jumped more than 16.5% on strong guidance, expecting third-quarter adjusted earnings of 34 cents per share on revenue of $736 million to $737 million, compared with consensus of 32 cents and $722 million, and also beat second-quarter estimates. Akamai Technologies rose 8.3% after second-quarter adjusted earnings of $1.59 per share on revenue of $1.10 billion topped LSEG forecasts of $1.57 per share and $1.09 billion.

Several companies made significant after-hours moves following their quarterly earnings reports. Airbnb surged about 7% after posting second-quarter earnings of $1.37 per share on revenues of $3.61 billion, beating analyst forecasts of $1.25 per share and $3.58 billion. Twilio jumped roughly 16% on strong current-quarter guidance, projecting adjusted earnings of $1.42 to $1.47 per share on revenue of $1.51 billion to $1.52 billion, above consensus estimates. Trade Desk tumbled 22% after its adjusted earnings of 34 cents per share and revenue of $715 million missed expectations of 40 cents and $751 million. Sweetgreen plunged 14% as its second-quarter loss of 22 cents per share on $193 million in revenue fell short of the anticipated loss of 15 cents on $195 million. DraftKings slipped over 1.5% after revenue of $1.44 billion missed the $1.51 billion estimate, though it reaffirmed its 2026 fiscal-year guidance. Cloudflare rallied 17% on upbeat guidance, while Akamai Technologies gained 12% and Instacart rose more than 8% on better-than-expected revenue. Dropbox fell nearly 6% after its non-GAAP gross margin of 81.6% narrowly missed the 81.7% consensus.

The second-quarter earnings season for US stocks is likely to drive a revaluation of software-related names. In particular, the impact of AI implementation on business performance is in focus, with attention centered on companies in the agentic AI space such as ServiceNow and Twilio. ServiceNow reported solid earnings on July 22, and a revaluation of its oversold stock appears inevitable. Twilio is set to report on August 6 and is drawing market interest as a prime beneficiary of AI tailwinds. In semiconductors, Qualcomm is eyeing a revaluation opportunity as the era of edge AI and physical AI approaches. These stocks have been oversold amid concerns over the so-called death of SaaS, but earnings are expected to prove their undervaluation and trigger sharp rebounds.

The 12 software development stocks tracked by this publication reported a strong first quarter, with revenues beating analysts' consensus estimates by 2.9% and next quarter's revenue guidance coming in 1.4% above expectations. Share prices have risen 36.3% on average since the latest earnings results. Twilio posted revenues of $1.41 billion, up 20% year on year and exceeding estimates by 4.7%, while Datadog achieved the biggest analyst estimate beat with revenues of $1.01 billion, up 32.2% year on year. Akamai delivered the weakest performance, with revenues of $1.07 billion, up 5.8% year on year and in line with expectations. Cloudflare recorded the fastest revenue growth in the group at 33.5% year on year, reaching $639.8 million.

Stifel upgraded Shopify to Buy from Hold with a price target of $150, up from $110, citing the company's share-gaining playbook in e-commerce and leadership in agentic commerce. Citi downgraded PepsiCo to Neutral from Buy with a price target of $145, down from $170, due to continued weakness in North America despite strategic actions. Among other notable calls, Wells Fargo upgraded Seagate to Overweight, Stifel upgraded Twilio to Buy, and Citi upgraded Toll Brothers to Buy, while Evercore ISI downgraded Travelers to In Line, Barclays downgraded Public Storage to Equal Weight, and Citi downgraded both Lamar Advertising and Ryder to Neutral. New initiations included Susquehanna starting IBM at Neutral, Truist starting Travelers at Buy, BTIG starting Equinix and Digital Realty at Buy, JPMorgan starting Honeywell Aerospace at Neutral, and BMO Capital starting Roper Technologies at Market Perform.

Shares of Rapid7, Twilio, and Teradata jumped in afternoon trading after the United States and Iran agreed to halt tit-for-tat military exchanges, easing fears of a wider Middle East conflict. Rapid7 rose 4.8%, Twilio gained 4.6%, and Teradata advanced 5%. The de-escalation removed a macro overhang by lowering oil prices and reducing inflation impulses that had pushed traders to price in a Fed rate hike, benefiting long-duration growth software stocks. The move also built on a chip-to-software rotation sparked by a report that OpenAI may delay its IPO, which softened fears that AI labs would quickly cannibalize incumbent SaaS companies.

Goldman Sachs initiated coverage on Twilio with a Buy rating and a US$300 price target, highlighting the company's role in AI-powered customer engagement and its margin expansion potential. The call comes alongside upward revisions to earnings estimates and Twilio's raised 2026 revenue guidance. CEO Khozema Shipchandler recently celebrated a decade on the NYSE, underscoring the company's positioning as core infrastructure for AI-centric businesses. The investment narrative now focuses on whether AI features and omnichannel tools can shift the mix toward higher-margin software while keeping core messaging relevant and compliant.