Why Is PATH Stock Tumbling Over 7% In Overnight Trading?

• Revenue climbed 13% to $410.3 million, beating estimates.
• Gross margin narrowed to 80% from 82% a year earlier.
• Retail traders remained largely bullish despite the selloff, with message volume jumping more than 800% and attention turning to UiPath’s Sept. 22 Investor Day.

UiPath, Inc.’s shares fell over 7% in overnight trading late Thursday after a volatile run despite the company reporting strong second-quarter results, with traders pointing to its sharp rally over the past month and narrowing margins as possible reasons behind the reaction.

UiPath revenue rose 13% to $410.26 million, beating analysts’ expectations of $397.8 million, while adjusted earnings were in line with targets at $0.15 per share.

The AI automation company even raised its revenue forecast for the current fiscal year, which ends in January 2028. It now expects a topline in the range of $1.789 billion to $1.794 billion, up from prior guidance of $1.776 billion to $1.781 billion. UiPath’s third-quarter revenue forecast of $440 million-$445 million also came in higher than expectations of $441.17 million.

However, the company’s Q2 gross margins came in at 80%, dipping from 82% in the corresponding year-ago quarter.

PATH stock has been riding a sharp upward momentum in recent months, surging more than 46% in August alone to mark its best monthly performance on record.

Meanwhile, short interest in PATH stock has risen sharply, from under 9% at the start of the year to 21.8% as of Thursday.

Just before the results, Needham raised its price target on PATH stock to $22 from $15, and kept its ‘Buy’ rating, while UBS raised its target to $19 from $12.

Needham analysts had said UiPath’s strengthening fundamentals and strong free cash flow growth were positives and its valuation – 13x enterprise value to estimated free cash flow – made the stock compelling at current levels.

UiPath: Management Changes

The AI automation company reshuffled its leadership, with Ashim Gupta continuing as chief operating officer after stepping down as CFO, Hitesh Ramani promoted to CFO, Brad Brubaker elevated to chief legal and administrative officer, and Kaiser Permanente executive Yazdi Bagli appointed to its board. 

Retail View On PATH

PATH was among the top five trending tickers on Stocktwits at the time of writing, with retail sentiment shifting to ‘extremely bullish’ from ‘bullish.’ The stock's 24-hour message volume rose over 800%.

While some traders viewed the dip as a strategic buying opportunity driven by institutional manipulation, others remain skeptical, citing valuation worries and a lack of clear momentum in agentic AI products.

“$PATH Earning is good but option players caused the stock price to drop. Institutions that created options  caused the price to go down because of too many calls. After it expires, it will go back up,” said a trader.

Another trader wrote: “$PATH I remain bullish. Good quarter results and in the right direction. Fundamentals are strong. I want ARR higher; that’s needed. Investor day will help on September 22. I think we will break $20 by the end of the month.”

Year to date, PATH stock has gained 11%, reflecting market-wide concerns that AI would hurt uptake of niche software.

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