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Docusign’s AI Push Is Giving Investors a Reason to Rethink the Stock

By Sam Quirke. Posted: 9/8/2026.

The great fear hanging over so many established software firms this year has been that the AI revolution will pass them by—or worse, sweep them aside. Docusign Inc. (NASDAQ: DOCU), long the dominant name in electronic signatures, has faced exactly that suspicion, with bears wondering whether a company built on signing documents online can remain relevant in an age of agentic AI.

In recent weeks, however, investors have grown notably more optimistic about traditional software stocks in general and Docusign in particular. Heading into its Q2 fiscal year (FY2027) report, Docusign shares had already rallied more than 60%, and the numbers did nothing to dent that enthusiasm. The stock initially moved higher after the release, bringing it within reach of its highest levels since late last year.

As with many of its peers, the market has been eager to see whether Docusign can reinvent itself around AI rather than be consumed by it. Based on the evidence from this past quarter, at least, the answer is clear.

Docusign’s Beat Gives the Turnaround More Credibility

Starting with the headline numbers, they gave the bulls plenty to celebrate. Docusign comfortably beat analyst expectations for both revenue and profit, with sales up more than 9% year over year and margins ahead of forecasts as well. For a company whose growth prospects some investors had written off, that was a solid statement.

Adding to the bullish overtones was the company’s confidence in its outlook. Management raised its full-year guidance, increasing its expectations for both revenue and, crucially, the growth of its recurring revenue base.

Underpinning it all was healthy customer growth, which reached a record above 1.9 million—not exactly the kind of trend you would expect from a company consigned to the dust heap. Instead, it was the kind of report that quietly rebuilds the entire investment case.

IAM Adoption Becomes the Real Story

Beyond the headline numbers and shiny metrics, however, the real story lies in how Docusign is addressing the AI question head-on. Rather than treating the technology as a threat, the company is weaving it into a broader platform called Intelligent Agreement Management, or IAM. The platform is designed to manage the entire life of a contract rather than just the signature at the end.

The evidence that this strategy is working is compelling. IAM now accounts for more than 15% of the company’s recurring revenue, up sharply from the prior quarter, and management expects that share to climb toward 19% by the end of the fiscal year. That steady progress is the clearest sign yet that customers are buying into the vision, not merely listening to the sales pitch.

Docusign is also building AI-powered tools that allow customers to create and deploy their own automated agents while integrating its platform with major AI providers and workplace applications. The aim is to make its software a deeply embedded hub for managing agreements—far harder to replace than a simple signing tool—and its best defense against commoditization.

Why the Bears Still Have an Argument

Still, despite that progress, the bears retain some legitimate concerns, with the central one being conversion. Impressive as IAM adoption is, the company’s overall growth remains fairly moderate, with revenue still expanding at single-digit rates since 2023. That puts the onus on management to ensure this AI-related momentum translates into meaningfully faster growth, not just a better product.

Then there is the ever-present competitive threat. Basic electronic signing is one of the more straightforward tasks that could easily and cheaply be replaced by a homegrown AI tool or a nimbler, lower-cost rival. That means Docusign has to work far harder to defend its turf than an entrenched platform like Salesforce (NYSE: CRM), whose sprawling web of customer data, workflows and integrations makes it enormously difficult to replace. This is precisely why the ongoing shift toward the stickier, more sophisticated IAM platform matters so much.

AI Turnaround, or Just a Better Quarter?

So which is it: a real AI success story or a stay of execution? The evidence from this quarter tilts firmly toward the former. Docusign is not merely surviving the arrival of AI; it is using the technology to transform itself from a one-trick signing service into something considerably more valuable.

That said, the caveats are real. The conversion of that adoption into faster company-wide growth remains unproven, and until the company reports consistently accelerating revenue growth, the jury is still out. The recent rally in Docusign shares also suggests that much of the upside is already reflected in the price, leaving little margin for disappointment. In other words, the company’s turnaround is making significant progress, but it is not yet complete.

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Retail Earnings Just Exposed a Bigger Divide in the U.S. Consumer Economy

Authored by Nathan Reiff. Published: 9/4/2026.

Looking back at the latest earnings season for retail stocks, an unusual K-shaped pattern emerges: Lower-income households appear to be struggling, with some value stores having difficulty reconciling their low prices with increasingly costly inventory. At the same time, however, a handful of specialized stores, including homeowner and contractor supply chains, have reported unexpectedly strong quarters in several respects.

This data supports the growing narrative that different groups of consumers are experiencing the economy in vastly different ways. Those with more disposable income are tending to spend freely, while those with less are being forced to tighten their belts even further.

The situation means that some companies—like The Home Depot Inc. (NYSE: HD) and Lowe's Companies Inc. (NYSE: LOW)—have performed better than others, including Walmart (NASDAQ: WMT) and Five Below Inc. (NASDAQ: FIVE). Even the latter two companies have posted hidden wins, suggesting a more complicated consumer landscape than some may anticipate.

Home Depot Finds Resilience in Pro Demand and Smaller Projects

Home Depot's Q2 2026 earnings of $4.92 per share came on revenue of nearly $48 billion, up about 6% year over year (YOY).

Both figures exceeded analyst expectations, fueled by comparable-store sales growth of 1.7%, a notably strong figure for the company.

Home improvement projects appear to be holding up fairly well, particularly among higher-income homeowners with more discretionary income to spend.

The company saw strong demand across many of its departments, supported by its new three-hour express delivery service. This offering may also appeal to consumers with more disposable income who are willing to pay extra for convenience.

To be sure, uncertainty about consumer sentiment in general, along with concerns about housing affordability, may negatively affect some types of home improvement projects. Still, Wall Street analysts have rallied behind Home Depot stock, calling it a Moderate Buy overall and forecasting approximately 18% upside.

Lowe’s Pro Growth Can’t Fully Offset Soft DIY Demand

On a macro level, Lowe's would seem to benefit from many of the same factors driving Home Depot's growth.

The company is also well-suited to serve consumers undertaking big-ticket home improvement projects, as some households are still prepared to spend substantial amounts on them.

This is reflected in Lowe's sales growth of 8.3% YOY in the latest quarter, along with strong free cash flow and pro sales growth that reflects robust contractor demand.

The issue for Lowe's may be that its overall competitive position is weaker than Home Depot's. Management recently reduced its full-year outlook because of softer DIY demand. Comparable sales increased by just 0.2% YOY. While that is better than a decline, it is a much slower rate than Home Depot's.

In addition, the company decided not to use tariff refunds to fund summer promotions to the same extent as some of its competitors, and its performance suffered as a result.

Five Below and Walmart Show Different Sides of the Value Consumer

Five Below faces margin challenges as a result of significant increases in fuel costs, while the benefits from tariffs are disappearing quickly.

Still, the company has managed to post some crucial wins in key areas. Profitability remained higher, with merchandise-margin gains and fixed-cost leverage serving as two important contributing factors.

Where Five Below really succeeded in Q2 2026, however, was sales growth of 23% YOY, including a 14% YOY improvement in comparable sales.

This may suggest that consumers are still willing to spend on discretionary items when the price is compelling, even as economic pressures make them more selective about larger purchases. Five Below may have cracked the code for continuing to see robust traffic and transactions even as economic pressures mount.

Walmart, on the other hand, disappointed investors with its latest earnings, even though it also raised its full-year guidance.

The issue may be that the company posted notably slower sales growth than in recent quarters. There may also be concern that its results are benefiting artificially from near-term tariff refunds that will not last.

Still, Walmart's digital business appears to be thriving and expanding its margins.

Advertising remains a high-growth area of the company's ecosystem, supported by growth in membership income, e-commerce and other businesses. This may explain why, despite shares falling by about 2.7% year to date (YTD), analysts remain very bullish on WMT stock overall and expect the stock to gain 24%.