Bank of America has upgraded Twilio Inc (NYSE:TWLO) to ‘Buy’ from ‘Underperform’ and raised its price objective to $190 from $110, citing improving fundamentals and a stronger outlook tied to artificial intelligence-driven communications.
The bank’s analysts view Twilio as a key infrastructure layer for emerging AI applications, particularly in voice and messaging.
They argued that many future AI-driven customer interactions, especially those involving voice, are likely to rely on platforms with scale and reliability, positioning Twilio as a potential beneficiary rather than a company at risk of disruption.
The firm highlighted accelerating growth in gross profit dollars as a central driver of its more constructive stance. It expects this metric to continue improving over the coming years, supported by AI-related demand as well as strength in Twilio’s core messaging business. This, in turn, is forecast to contribute to expanding free cash flow margins.
Bank of America noted that its confidence in Twilio’s growth potential has increased, reflecting a deeper understanding of the company’s products and competitive positioning. It added that concerns around margin volatility are less significant if profit growth continues to strengthen.
Near-term catalysts include Twilio’s upcoming quarterly earnings report, due on April 30, where signs of accelerating growth could reinforce the bullish thesis.
The firm also pointed to the company’s annual Signal customer event in early May as a potential source of product announcements and customer updates.
Bank of America raised its forecasts for 2027 gross profit and free cash flow modestly, reflecting expectations for continued operational improvement.
Its valuation is based on a premium multiple relative to peers, which it said is supported by Twilio’s positioning in AI-driven communications and anticipated margin expansion.
Shares of Twilio traded up 3.3% at about $150 on Wednesday afternoon.
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