SpaceX's $26B AI payday 
Docusign: Another Beat, Another Selloff—Why the Analysts Are WrongWritten by Sam Quirke on June 8, 2026 
Key Points
- DocuSign shares are selling off after June 4 earnings despite beating estimates, raising guidance, and reporting solid results from its AI initiatives.
- Wall Street remains fixated on the lack of a clear path back to double-digit growth, which is keeping sentiment subdued.
- However, with accelerating IAM adoption, aggressive share buybacks, and solid fundamentals, the market may be underestimating the turnaround story.
- Special Report: 95% of SpaceX profits are already gone
For years, DocuSign Inc (NASDAQ: DOCU) has been one of the market's favorite disappointments. What was once a pandemic-era darling has spent much of the last few years trapped in a seemingly endless cycle of missed opportunities and fading investor enthusiasm. It’s also found itself on the wrong side of the AI revolution, which sent its stock down by more than 40% earlier this year. Yet something had started to change in recent weeks. Before Thursday night’s earnings release, shares had rallied roughly 30% since the middle of May as investors grew excited about the potential for DocuSign to pull off a HubSpot Inc (NYSE: HUBS) style pivot. Then came Thursday's report. Despite the company beating expectations and raising forward guidance, the stock sold off sharply, and analysts weren’t impressed. At first glance, this reaction looks justified, but dig a little deeper, and there’s an argument that the market is focusing on the wrong things.
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The Quarter Was Better Than the Market Reaction SuggestsWith what is becoming impressive consistency, DocuSign’s headline numbers were once again solid and comfortably beat expectations. For a company trying to convince the market it’s capable of making a sustained comeback, that’s exactly the kind of track record you want to be framing quarterly reports around. In addition, management increased its revenue outlook, while profitability and free cash flow were both impressive. Beyond that, executives pointed to growing demand for DocuSign's AI-native Intelligent Agreement Management, or IAM, platform, noting that more than 40,000 customers have now invested in the offering. For a company that spent much of the last several years struggling to convince investors it had a credible growth story beyond electronic signatures, that’s a meaningful development. It also ties in well with the broader trend we’re seeing with traditional software companies trying to work with AI, rather than against it. But the Headwinds Are Still ThereHowever, the problem is that investors and analysts were not only looking for something much more eye-catching, but also saw some weak spots in the otherwise rosy outlook. DocuSign’s annual recurring revenue guidance, for example, remained unchanged at 8.5% growth, which many had viewed as the most important metric heading into the report. There was also a sense that visibility into the company’s IAM growth trajectory remains limited. These reasons alone were enough for Bank of America to maintain its Underperform rating. Morgan Stanley struck a similarly cautious tone. While acknowledging strong execution and growing IAM adoption, it argued that the platform's economics remain difficult to evaluate. Still, it maintained its Equal-weight rating on the stock, and its price target of $69 suggests the market’s reaction has been way too negative. DocuSign shares were trading around $50 at the start of Friday’s session, which means bearish Morgan Stanley is targeting roughly 40% upside from here.
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Wall Street Wants Proof Before the Story Fully Plays OutThe bullish argument is strong. Those willing to lean into the glass-half-full thesis see DocuSign as a company successfully transforming itself from a single-product provider into a broader agreement management platform. They see increasing customer adoption, growing product breadth, and the potential for AI-powered workflows to create entirely new monetization opportunities. Importantly, management remains confident and has been repurchasing shares at record levels in recent months. These aren’t typically things you’d expect from a company going through an existential crisis. The market's challenge is that these benefits have not yet fully materialized in projected growth rates, leaving investors frustrated. In a market where there are plenty of stocks ripping higher off the back of near-vertical growth rates, choosing to invest in DocuSign carries some pretty high opportunity costs. Why the Selloff Could Be an OpportunityAll that being said, there are more reasons to be bullish than bearish right now, especially when you consider how much the stock has sold off. The company is beating expectations, raising forward guidance, buying back its own shares and delivering promising results from its AI initiatives. It might not be doing all of this at the pace investors might expect, or at a pace similar to other software stocks, but it’s still solid forward momentum. Against that backdrop, DocuSign shares continue to trade close to multi-year lows, which means the risk-reward profile is particularly attractive right now. Read this article online › Read More
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