UiPath and Pegasystems Sink 7% as Price Target Hikes Arrive Without a Single Buy Rating

The enterprise AI automation cohort is selling off Tuesday as Wall Street’s response to UiPath‘s (NYSE:PATH | PATH Price Prediction) fiscal second-quarter report crystallizes into a chorus of higher price targets paired with non-buy ratings. The iShares Expanded Tech-Software Sector ETF (CBOE:IGV) is down 2% on the session, and the automation names inside it are pacing the decline. Analysts think UiPath stock is worth more than it was a week ago, but their ratings remain firmly on the sidelines.

UiPath stock is down 7% to $14.11 in Tuesday afternoon trading, extending a selloff that has undone a 40% August rally into earnings. Pegasystems (NASDAQ:PEGA) shares are down 7% to $34.86 without a fresh company-specific catalyst, seemingly moving in sympathy with the group.

Meanwhile, C3.ai (NYSE:AI) stock is down 1% to $10.35, holding up notably better than its peers. That relative resilience complicates any read that the entire agentic AI software group is being marked down as one block, because C3.ai’s own turnaround narrative from last week’s earnings call gives it a different setup from UiPath’s growth-quality debate.

Four Target Hikes, Zero Buy Ratings

UiPath’s fiscal Q2 2027 revenue of $410.26 million topped estimates, and annual recurring revenue reached $1.938 billion, up 12% year over year. The company also swung to $32 million in GAAP operating income from a prior-year loss, marking its fourth consecutive quarter of GAAP profitability. That combination was enough for four Wall Street firms to lift price targets while leaving all of them parked on the sidelines.

Koji Ikeda at Bank of America raised his PATH stock price target to $15 while keeping an Underperform rating, arguing the quarter did little to answer whether AI will meaningfully accelerate ARR growth. Truist lifted its target to $17 with a Hold on more agentic AI deals and modest customer growth improvement, and TD Cowen went to $16 with a Hold, citing steady performance and stable retention. DA Davidson also nudged its target higher while keeping a Neutral rating, rounding out a group that collectively signaled the recent rally had gotten ahead of the fundamentals.

Pegasystems Caught in the Same Downdraft

Pegasystems carries its own overhang from its Q2 2026 report, when total annual contract value (ACV) growth slowed to 7% year over year and CEO Alan Trefler flagged AI-driven client hesitation that management warned could persist through year-end. Pega Cloud remained a bright spot, with Pega Cloud ACV up 22% to $926.29 million, though the topline miss and elongated sales cycles left Pegasystems stock exposed to any negative read across the automation software peer group.

With no obvious news of its own today, the 7% PEGA stock drop looks like guilt by association with UiPath rather than a stand-alone Pegasystems catalyst. Pegasystems stock’s 41% year-to-date decline shows how much repair work is already priced in, which arguably raises the bar for meaningful further downside on sector sympathy alone.

What to Watch Next

The next scheduled test for UiPath is its investor day in Las Vegas on September 22, followed by its Fusion user conference running through September 25. That’s the venue where management can put a sharper number on how AI attach rates translate into ARR acceleration, which is the specific bar every analyst note pointed to on Tuesday.

The bull case rests on AI-attached deals meaningfully widening deal scope and stickiness, and UiPath said 18 of its top 20 deals in the quarter included AI. The bear case is that four target hikes with no rating changes is Wall Street’s polite way of saying the fundamentals haven’t yet earned a rerating, particularly with UiPath stock having rallied hard into the report.

Shareholders can watch for a lifted ARR outlook at UiPath’s investor day, or another quarter of the growth question being deferred. Position sizing on both UiPath and Pegasystems should stay modest given the recent volatility, and investors holding either name should keep their exposure trimmed to survive a stretch of range-bound trading if the automation-software rotation drags on.

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