1 Artificial Intelligence (AI) Stock Can Be In the Second Half of 2025 and After

The broader weaknesses of the stock market make Twilio (NYSE: TWLO) So far this year, cloud communication experts have lost more than 4% of their value at the time of writing. But the company's latest quarterly report has injected life into stocks.

Twilio jumped more than 2% after releasing its first 2025 results on May 1. It is worth noting that the stock has recovered 23% over the past month, with its stable quarterly results and guidance suggesting that more upside potential may be in the card.

Let's take a look at the catalysts driving Twilio's growth and check why the technology stock can be higher in the second half of the year and beyond.

Image source: Getty Images.

Twilio reported revenue in the first quarter rose 12% year-on-year to $1.17 billion. As customers adopt more AI-centric cloud communication tools, the company's revenue grew 42% over the same period last year, resulting in increased spending for existing customers.

This is from Twilio's net expansion rate based on the US dollar at 107%, up 5 percentage points from the same period last year. The net expansion rate based on the U.S. dollar compared revenue from Twilio active customer accounts to a quarter of revenue, compared to revenue generated from the same account a year ago.

Reading more than 100% of the readings in this metric indicates that Twilio's existing customer base is using more solutions, or increasing the use of existing solutions. This is not surprising, as Twilio now offers AI-centric tools such as conversation relay, allowing customers to integrate voice-enabled AI solutions into their customer service applications.

Management notes that conversation relay can help customers build voice AI agents because it provides over 1,000 natural sounds in 40 languages. Good thing is, Twilio has begun to witness the need for sound AI products, with one of the clients using the company’s tools to build voice AI agents. Importantly, the size of the voice AI agent market is expected to grow at a rate of 35% per year over the next decade, so it is very likely that Twilio’s voice AI platform will attract more customers in the long run and drive stronger growth for the company.

Twilio has a huge foundation with over 335,000 active customer accounts. The figure rose 7% year-on-year in the last quarter and shows that the company has a huge opportunity to cross-sell its AI products, with the company having stronger revenue and revenue growth in the long run.

So, it’s no surprise that Twilio has increased its full-year organic revenue growth guidance to 7.5% to 8.5%, while the midpoint is slightly increased by 50 basis points. Even better, its non-GAAP operating income is now expected to grow to $862.5 million, compared with an earlier estimate of $837.5 million. Starting last year, this will translate to 38%.

Furthermore, Twilio's top-notch growth has been accelerating over the past five quarters, and the discussion above suggests that this trend may continue in the future with the adoption of AI-focused tools.

Twilio's median target price is $130, according to 30 analysts covering the stock's price target of $130, indicating a 30% increase from current levels. However, this kind of cloud stock is likely to be better than this.

Analysts have increased their earnings expectations in 2025 and over the next few years. This is obvious in the chart below.

TWLO EPS Estimation for Current Accounting Year Charts
YCHARTS' TWLO EP estimates for current fiscal year data.

Assuming Twilio earns $4.59 per share in 2025 revenue and trades at 29 times the revenue at the end of the year, this is a technology-filled deal Nasdaq 100 The index has multiple returns (using it as a proxy for technical stocks), and its share price may reach $134. That will increase by 30% from current levels. As Twilio adopts AI solutions in the cloud communications market, more upside space cannot be ruled out, as Twilio seems to be able to further improve guidance.

The above chart also shows that Twilio's revenue growth may accelerate over the next few years. This makes the stock an immediate effortless purchase, as it trades at just 23 times forward earnings.

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The harsh Qiao Han has no position in any of the stocks mentioned. Motley Fool has a place and recommends Twilio. Motley Fool has a disclosure policy.

1 Artificial Intelligence (AI) stock that can be found in the second half of 2025 and beyond was originally published by Motley Fool