PATH stock: Can UiPath keep its RPA lead?

UiPath [PATH] is a leading automation software maker whose products and services free up workers from monotonous tasks by streamlining workflows and orchestrating robots. 

UiPath is the dominant player in the robotic process automation (RPA) market – estimates put its market share between 35% and 57%, although an exact figure is hard to pin down. But, given the rise of agentic artificial intelligence (AI) workflows, the company is only just getting started. Founder and CEO Daniel Dines told CNBC at the end of 2025: “We are in the early innings of deployment of agentic AI, we see a very solid demand. I can think that, since the early days of RPA, I have not seen such a huge interest from customers in a renewed automation initiative.”

Here, we unpack the outlook for UiPath following its Q2 2027 earnings on 3 September, and ask what might move PATH stock in the near term. 

UiPath targets unpredictable case management 

The firm added a string to its agent orchestration bow in June with the launch of Maestro Case, an automation platform for handling messy, unpredictable business work, including customer disputes and fraud investigations.

“Modern case management is no longer about tracking work – it is about orchestrating dynamic complex processes, where exceptions are the norm,” said UiPath Chief Technology and Product Officer Raghu Malpani.

According to the press release, early deployments indicate that Maestro Case could increase the number of cases resolved that do not require human intervention three to five times, while the platform has reduced the average case handling time by 60-80%.

PATH stock’s wild swings

Software stocks have been heavily shorted in 2026 amid fears that AI could disrupt traditional software-as-a-service models. One investor shorting the software theme was former OpenAI researcher Leopold Aschenbrenner. However, when his hedge fund Situational Awareness suffered huge losses – and eventually faced liquidation – he was forced to unwind his positions. This caused the software theme to rally.

As a result, PATH stock may be down 7.32% since the start of the year to 4 September, but it is up 37.59% in the past six months and 16.4% in the past month. 

Despite these gains, the share price cratered 16.63% in reaction to the Q2 2027 earnings reported after the market closed on 3 September. 

Q2 results show signs of slowing net new ARR

PATH stock initially jumped nearly 10% in reaction to the results, which beat revenue expectations and raised full-year guidance, then quickly swung the other way, likely due to concerns about subscriptions. 

The good news: revenue for the three months to 31 July rose 13% to $410m, comfortably beating the $397.8m analysts had expected. Full-year guidance was raised to a range of $1.789bn-1.794bn from a previous forecast of $1.776bn-1.781bn.

Annual recurring revenue (ARR) was $1.94bn, up 12% year-on-year. Net retention rate was 109%, meaning that the average customer spend was 9% higher than the year-ago quarter.

The bad news: Net new ARR in Q2 2027 was $37m, down from $49m in Q1 2027 and $70m in Q4 2026. This would imply that fewer new customers are signing up for a UiPath subscription. 

UiPath could lose out to large software vendors adding agentic AI functions to their products. Salesforce [CRM] and Anthropic announced Claudeforce at the end of August, a feature that allows Salesforce’s CRM users to connect to Claude. It is being seen by some as Salesforce pushing deeper into orchestrating AI agents across enterprise workflows, which up until now UiPath has dominated through its position as the RPA market leader. 

Here is how UiPath’s current fundamentals compare to those of Salesforce and those of ServiceNow [NOW], which is also betting on AI automation through an RPA product. 

Source: Stockanalysis.com

PATH stock could be considered fairly valued or undervalued based on its forward-looking metrics. CRM stock is almost identical in valuation. On the other hand, NOW stock could be considered overvalued – its forward-looking metrics are almost double, although its revenue projections for the current and next fiscal years are double those of the other two.

Ultimately, PATH stock’s valuation is going to be determined by whether competing products such as Claudeforce deter new customers from taking out a UiPath subscription. 

PATH stock: The investment case

The bear case

The obvious bear argument is the company’s slowing net new ARR. PATH stock received a couple of notable downgrades following the Q2 results. 

Canaccord Genuity analyst Kingsley Crane downgraded the stock to ‘hold’ from ‘buy’, although he raised his price target to $17 from $15, implying an upside of 11.92% from the most recent closing price of $15.19. “The competitive landscape is intensifying quickly, perhaps faster than reported numbers are capable of showing,” wrote Crane, highlighting potential risks from Claudeforce.

BofA analyst Koji Ikeda reiterated an ‘underperform’ rating, although his price target was raised to $15 from $13, implying a downside of just over 1% from the most recent closing price. “We do not think the results resolve the key debate, which is whether AI is a tailwind that will result in meaningful ARR growth acceleration,” Ikeda wrote.

The bull case

Despite the pessimism surrounding net new ARR, some analysts remain bullish on PATH stock.

RBC Capital Markets’ Matthew Hedberg reiterated a ‘sector perform’ rating following the earnings, while also raising his price target to $17 from $15. He noted continued momentum around AI-driven deals, as well as product adoption and improving customer retention – the net retention rate mentioned earlier.

TD Cowen analyst Bryan Bergin maintained a ‘hold’ rating and raised his price target to $16 from $13, implying an upside of 5.33% from the most recent closing price. UiPath’s Investor Day on 22 September could shed some light on how the company plans to reaccelerate net new ARR, Bergin noted.

Conclusion

As large software vendors integrate agentic AI functions into their platforms, it will likely reduce the need for a separate orchestration vendor. This could lead to lower net new ARR and fewer subscriptions for UiPath.