As MarketBeat has highlighted, software stocks have had a tough run in recent months. Rising rates, ongoing macro uncertainty, and growing fears that AI could disrupt traditional SaaS models have left much of the sector trending downward. Against that backdrop, Twilio Inc (NYSE: TWLO) had quietly been doing the opposite, rallying roughly 30% from late February through mid-March while the tech-heavy Nasdaq struggled to stay flat. The stock has since pulled back to around $125, partly amid broader market volatility and a string of insider sales by the CEO and CFO under pre-arranged trading plans. Even after that retreat, Twilio is still meaningfully outperforming its software peers.
What makes the move even more striking is that Twilio is doing so while trading at a price-to-earnings (P/E) ratio of over 600. In almost any environment, that would be enough to scare investors away, and in the current macro backdrop, it should be even more of a red flag.
And yet, long-term, the stock continues to push higher. As we’ll see below, there are good reasons for this that, for now at least, far outweigh any concerns about its triple-digit valuation. Here's what's driving it.
