Twilio Inc. (NYSE:TWLO) shares are tumbling Friday after HSBC downgraded the stock to Reduce from Hold, arguing its recent rally tied to Meta’s Muse AI agent has left shares overvalued.
- Twilio stock is taking a hit today. What’s behind TWLO decline?
HSBC Downgrades Twilio, Citing Overvaluation Tied to Muse Hype
HSBC analyst Sameer Lam cut his rating on Twilio to Reduce from Hold while holding his price target steady at $211, arguing the stock has gotten ahead of itself on speculation it stands to gain from Meta’s Muse AI agent.
The stock has surged roughly 30% since Muse debuted on September 8 and has nearly tripled over the past year. According to Lam, investors have started viewing Twilio as essentially the plumbing behind Muse and other consumer-facing AI agents, a framing he thinks assigns Twilio too large a slice of the resulting upside, Investing.com reported.
Lam wrote that “we agree with the underlying industry logic that AI agents will expand communications volumes such as calls, messages and authentications,” though he cautioned that Twilio’s actual role is likely to be narrower than investors assume.
Wall Street Remains More Bullish Than HSBC
That cautious stance puts HSBC well outside the mainstream view on the stock. Twilio holds an overall Buy consensus, with the average analyst target sitting at $254.59, more than $40 above where HSBC has set its own number.
Other firms have moved in the opposite direction lately: TD Cowen bumped its target up to $300 on September 22, and Rosenblatt raised its own to $290 that same day, both while sticking with Buy ratings.
TWLO Shares Are Falling
TWLO Price Action: Twilio shares were down 6.77% at $279.36 at the time of publication on Friday, according to Benzinga Pro.
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