Once thought to be doomed by the AI revolution, robotic process automation specialist UiPath (PATH 6.26%) defied critics in 2025. The stock jumped 29% last year, according to data provided by S&P Global Market Intelligence, as the company's AI strategy came into focus.
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The best of both worlds
Robotic process automation, which involves creating software "robots" that carry out repetitive tasks on a computer, is deterministic yet fragile. Large language models are the opposite, as they can adapt to changing user interfaces, but sometimes exhibit inconsistency and are prone to errors. Still, LLMs can do a lot of things well enough to threaten demand for UiPath's core RPA platform.
UiPath's strategy is to combine both technologies to offer a unified automation platform. "Our ability to bring deterministic automation, agentic automation, and orchestration together in one trusted, governed system is a true differentiator," said UiPath CEO Daniel Dines in the most recent earnings release. More than 950 companies are now developing AI agents on UiPath's platform.
Partnerships are part of UiPath's plan to benefit from AI rather than be threatened by it. In 2025, the company announced integrations with Microsoft Azure AI Foundry, a collaboration with OpenAI, the use of Alphabet's Gemini models for a conversational agent, a collaboration with Nvidia, and a partnership with Snowflake.
Revenue rose 16% year over year in the third quarter of fiscal 2026, with annual recurring revenue rising by 11%. Dollar-based net retention was 107%, indicating that existing customers are expanding their spending. The stock surged in response to those results and UiPath's outlook for the fourth quarter.
A potential AI winner
Shares of UiPath are still down around 80% from their all-time high, but the company now has a clear strategy around AI. Investors started to buy into that strategy in 2025, propelling the stock to a market-beating gain.
NYSE: PATH
Key Data Points
By combining rules-based robotic process automation with nimbler LLMs, UiPath has the potential to emerge as one of the leaders in the enterprise automation market. AI-only solutions inevitably encounter issues due to the limitations of the technology, and RPA-only solutions lack robustness. The rise of AI agents posed a significant threat to UiPath's business a year ago, but the company has successfully pivoted and can now thrive in the era of AI.
UiPath stock trades for around 6 times the average analyst estimate for full-year revenue, and around 26 times adjusted earnings per share. While the stock is a bit pricey considering the company's growth rate, AI has the potential to accelerate UiPath's growth as more enterprises seek out automation solutions.
