Why Investors Are Talking About UiPath Stock Now

UiPath (NYSE: PATH) is back in the spotlight.

The company -- one of the pioneers in robotic process automation (RPA) -- has seen renewed investor interest as artificial intelligence (AI) reshapes how businesses think about productivity.

With its shares recovering from multiyear lows and new AI-driven initiatives gaining traction, UiPath's story is becoming too intriguing to ignore.

Image source: Getty Images.

Understanding UiPath's business model

At its core, UiPath helps organizations automate repetitive, rule-based digital tasks -- the kind that bog down employees and waste valuable time. Using its platform, businesses can build "software robots" that mimic human actions: moving data between systems, generating reports, approving invoices, or onboarding new employees.

The company sells its automation platform primarily through subscription-based software licenses. Customers usually pay a one-off license fee, followed by recurring subscription fees. These recurring software-as-a-service (SaaS) and maintenance fees accounted for 56% of its revenue in fiscal year 2025 (ended Jan. 31, 2025). UiPath also earns from professional services -- helping clients design, deploy, and manage automation workflows -- though this makes up a smaller share of total revenue.

Its long-term pitch is simple: Automation is the foundation of digital transformation. As organizations digitize operations, UiPath aims to be the default automation layer connecting humans, systems, and now, increasingly, AI.

Why are investors excited about the company?

There are two main reasons UiPath is back on investors' radars.

A new AI-driven vision

UiPath has repositioned itself as an "AI + automation" platform rather than a pure-play RPA vendor. The company has integrated generative AI capabilities into its tools -- such as letting users describe automation tasks in plain English, while the platform builds the workflow automatically. This approach lowers adoption friction, especially for non-technical users.

Besides, automation is no longer a back-office function; it's becoming central to how companies operate in the AI era. As enterprises integrate large language models (LLMs) and other AI models into their workflows, they need automation platforms to orchestrate the entire process -- connecting automation robots, humans, and digital agents. That's where UiPath fits in.

Investors are realizing that UiPath could serve as the "glue" binding together disparate AI systems. Instead of competing with OpenAI or Anthropic, UiPath enables its integration into real business processes. This positioning could give the company an edge as AI adoption spreads across industries.

UiPath has significantly narrowed its losses

After a challenging fiscal year 2022 marked by widening losses, UiPath has gradually improved its financials. For perspective, net losses reached a high of $526 million in the year ended Jan. 31, 2022, but have narrowed to $77 million in fiscal 2025. Ongoing revenue growth, as well as margin expansion, have contributed to the financial improvements.

The financial recovery extended into the quarter ended July 31, 2025, with revenue increasing 14% year over year to $362 million and operating loss narrowing from $103 million to $20 million. Dollar-based net retention rate remained solid at 108% -- not explosive, but steady enough for a software company tightening its operations.

If UiPath can sustain this trajectory, it won't be long before it finally reports an operating profit. In fact, non-GAAP (adjusted) operating income was $62 million in the quarter, suggesting management is on the right track.

Where is UiPath heading next?

UiPath's next phase is all about convergence -- merging AI, automation, and analytics into a single intelligent operations platform. Its Autopilot feature shows this direction clearly: Users can describe tasks in natural language, and UiPath automatically generates the corresponding automation and workflow. If successful, this could greatly expand its addressable market by empowering less technical employees to automate their own work.

Still, challenges remain. Competition from giants like Microsoft and emerging AI start-ups is intensifying. The silver lining is that the AI market is vast and growing, so multiple players can succeed at the same time. Besides, UiPath has certain advantages, such as data, customer relationships, and existing workflow integrations, to stay relevant as automation and AI blend into a single category.

In short, there are good reasons to be optimistic about the company's prospects.

What does it mean for investors?

UiPath isn't another hype-driven AI play. While not as flashy as pure AI model companies like OpenAI, its automation backbone could quietly become indispensable in enterprise adoption of generative AI.

Investors are talking about UiPath again because the narrative has evolved from survival to adaptation -- and potentially, new growth opportunities.

If UiPath continues executing while embedding AI deeper into its automation stack, it could emerge as an essential software infrastructure player of the next decade.

It's a stock worth keeping a close eye on.

Lawrence Nga has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Microsoft and UiPath. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.