Could This Quiet AI Company Become the Next Big Winner?

UiPath (NYSE: PATH), the world's largest robotic process automation (RPA) company, went public at $56 per share on April 21, 2021. But today, it trades at about $14.

The tech upstart initially impressed the bulls with its rapid growth and its exposure to the expanding artificial intelligence (AI) market. Yet over the following four years, it lost its luster as its sales growth cooled off, it stayed unprofitable, and it kept switching CEOs. It also faced fresh competition from generative AI platforms like OpenAI's ChatGPT and Microsoft's Copilot, and rising interest rates compressed its valuations.

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But with an enterprise value of $5.5 billion, UiPath trades at just 16 times this year's adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA). That valuation looks cheap compared to the market's other high-flying AI stocks, but it's still a divisive investment.

The bulls will argue that it's still a great play on the growing RPA market and a quiet way to profit from the secular expansion of the AI market. The bears believe it deserves a lower valuation because it faces too many near-term and long-term challenges. Let's weigh these arguments to see if UiPath might become the next big winner in the AI space.

What does UiPath do?

UiPath's RPA tools can be plugged into an organization's existing software to automate repetitive, rule-based tasks like onboarding customers, entering data, processing invoices, and sending out mass emails. These tools can potentially replace a lot of human workers. The company was founded in 2005, and it launched its first RPA tools in 2013. It established a first mover's advantage in that nascent market and pulled far ahead of its competitors.

UiPath controls over a third of the RPA market, according to Gartner. Its closest competitors -- Automation Anywhere, Blue Prism, and Microsoft -- hold single-digit shares. Grand View Research expects the RPA market to expand at a compound annual growth rate (CAGR) of 43.9% from 2025 to 2030 as more companies focus on improving their operational efficiency.

How fast is UiPath growing?

From fiscal 2021 to 2025, which ended in January, UiPath's revenue grew at a CAGR of 24% from $608 million to $1.4 billion. But its top-line growth decelerated in 2023, 2024, and 2025 -- when its revenue rose just 9%.

UiPath mainly attributed that slowdown to the challenging macro environment, but it also coincided with the growth of the generative AI market. The bears argued that those new generative AI agents -- which could automate many of the same repetitive tasks as dedicated RPA tools -- would render UiPath obsolete before it could even break even.

As UiPath's growth cooled off, it brought in Rob Enslin, who previously worked at Alphabet's Google Cloud, to share the CEO role with Daniel Dines, its founder and original CEO. Dines stepped down in early 2024 and left Enslin in charge as its sole CEO, but Enslin abruptly left a few months later and Dines returned to the helm.

Those CEO changes suggested that UiPath was struggling to keep pace with the evolving AI market. It's rolling out more AI tools to help companies analyze the data which flows through its software robots, but more diversified AI platforms, like Microsoft's Copilot, already bundle similar tools into a broader range of productivity applications.

Are UiPath's high-growth days over?

From fiscal 2025 to 2028, analysts expect UiPath's revenue to grow at a CAGR of 9%. That's significantly slower than the projected growth rate of the broader RPA market -- which suggests it could be overtaken by its more diversified, AI-powered competitors.

As UiPath faces these challenges, it should expand more aggressively to stay relevant. However, it's still focused more on cutting costs and pruning its workforce with layoffs instead of making bold investments and acquisitions. On the bright side, analysts expect it to turn profitable on a generally accepted accounting principles (GAAP) basis in fiscal 2026, and for its net income to nearly triple by fiscal 2028. They also expect its adjusted EBITDA to increase at a CAGR of 19% from 2025 to 2028.

UiPath's prioritization of its profits over its sales suggests its high-growth days are over. It might still be an attractive takeover target, but I don't see it becoming the next big AI software stock over the next few years. It's dominating the niche RPA market, but the definition and borders of that fluid market could shift over the next few years.

Leo Sun has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Microsoft, and UiPath. The Motley Fool recommends Gartner and 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.