Skip to navigationSkip to main contentSkip to right columnADVERTISEMENTMarc Guberti, The Motley FoolTue, June 30, 2026 at 4:50 PM GMT+2 3 min readTwilio (NYSE: TWLO) has enjoyed a strong start to the year but now finds itself in a 20% correction. Many companies use Twilio's platform to communicate with customers via text, video, artificial intelligence (AI) chatbots, and other capabilities. It's natural for stocks to take breathers after long runs, but a high P/E ratio offers some reason for concern.Image source: Getty Images.Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »Twilio is a good company but a bad stockTwilio has good fundamentals, but it's hard to justify a stock with a P/E ratio hovering near 300. The company delivered 20% year-over-year revenue growth in the first quarter. Those sales come from a solid foundation, which includes more than 400,000 customers and 68% of Fortune 500 companies.However, growth investors aren't concerned only with the current foundation. They want revenue acceleration and enticing long-term growth prospects. If those are good, investors can more easily justify a stock that is trading near a 300 P/E ratio, but that isn't the case for Twilio.The company anticipates only 15.5% to 16.5% year-over-year revenue growth in Q2 and 14% to 15% year-over-year revenue growth in full-year 2026. These aren't exciting numbers, especially when investors can choose from AI stocks that are delivering substantial growth rates well above the 14% to 15% growth rate Twilio expects to deliver throughout the year.The agentic AI angle is worth monitoringNot everyone feels bearish about Twilio. Goldman Sachs gave it a $300 price target and cited Twilio's positioning in agentic AI infrastructure.Twilio's list of top customer wins from its Q1 presentation includes several cases of agentic AI translating into more customer engagement, which bodes well for the bullish narrative. Twilio has formed the backbone for some customers' voice AI infrastructure, customer service chatbots, and AI agents for sales. Twilio CEO Khozema Shipchandler even touted the company as a "foundational infrastructure layer in the era of AI," demonstrating that it wants to capitalize on the opportunity.However, the impact of agentic AI did not show up in guidance, which is a red flag. Leaders in the AI chip and memory cycle have regularly pounded the table with compelling guidance that shows growth rates much higher than Wall Street expected.Terms and Privacy PolicyEU DSA contactPrivacy & Cookie SettingsMore Info