Cathie Wood’s 11 Favorite AI Stocks

2. UiPath Inc (NYSE:PATH)

Cathie Wood’s Latest Stake Value: $377,197,499

UiPath Inc (NYSE:PATH) has lost about 50% in value this year as the market is losing confidence the company can achieve a successful turnaround. Recently the company posted a software quarter and announced an abrupt CEO change.

Recently, Macquarie downgraded the stock and cut its price target from $29 to $12. The analysts had previously believed that UiPath Inc (NYSE:PATH) was on track with its turnaround strategy as it entered the first quarter of fiscal 2025. However, following the unexpected resignation of CEO Rob Enslin, a downward revision in guidance, and management’s admission of underperformance in its go-to-market approach, they revised their outlook. The analysts now view the stock as having limited potential unless UiPath Inc (NYSE:PATH) can demonstrate a consistent recovery.

UiPath is one of the pioneers in the robotic automation process market. Its software helps companies automate reptitivie tasks. That makes the company one of the first entrants in the AI market. But the generative AI revolution has create a dilemma for the company: every other software company is now launching no-code automation tools based on AI. Companies are also cutting costs and instead of buying RPA software from UiPath, they are hiring AI talent to make such processes in-house.

 While UiPath Inc (NYSE:PATH) RPA tools are better suited for complex enterprise-level tasks, Microsoft’s Power Automate and integration of genAI in platforms of Salesforce (CRM) and ServiceNow (NOW) are among the biggest challenges for UiPath.

UiPath Inc (NYSE:PATH) is expected to generate around $160 million in non-GAAP operating profits this fiscal year, leaving the stock valued at 41 times forward non-GAAP operating profits—a steep multiple given the company’s current challenges and uncertain growth trajectory.