HSBC Downgrades Twilio After Meta Muse AI Rally

Financial institution HSBC downgraded Twilio Inc. to a Reduce rating on September 25, 2026, asserting that the company's stock has become overvalued. The downgrade follows a 30% surge in Twilio shares after Meta Platforms launched the Muse AI agent on September 8, which led investors to speculate that Twilio would provide the primary communications infrastructure for the tool.

HSBC analyst Sameer Lam stated that while AI agents are expected to increase overall communication volumes for calls, messages, and authentications, the market has overestimated Twilio's ability to capture that specific value. Lam noted that competitors such as Bandwidth and Sinch offer similar services, and suggested that Meta could bypass Twilio entirely by connecting directly to wholesale carriers through SIP or using other providers.

HSBC maintained a price target of $211 for Twilio. The firm concluded that the stock's current price-to-earnings ratio of 45.3x is difficult to justify given the limited projected revenue gains resulting from the Muse launch.