DOCU Stock: Is DocuSign the Next Big AI Play?


  • DocuSign (DOCU) stock rose slightly before falling after the company’s fiscal Q1 results beat expectations, and it raised its full-year guidance.
  • The firm already utilizes AI and said that it would start generating contract summaries using ChatGPT.
  • DOCU stock climbed about 18% in the last month.
DOCU stock - DOCU Stock: Is DocuSign the Next Big AI Play?

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DocuSign (NASDAQ:DOCU) stock advanced slightly in early trading before dropping after the company reported stronger-than-expected fiscal first-quarter results and raised its guidance after the market close. The company has an artificial intelligence (AI) analytics business and has said that it would use AI to generate summaries of deals. In conjunction with its Q1 results, DOCU pushed back against the idea that its business would be hurt by the advent of AI-powered chatbots.

The company enables individuals and companies to electronically sign legal contracts.

After some positive early trading, DOCU stock has now dipped into the red by about 0.5%.

DocuSign’s Beat-and-Raise Q1 Results

DocuSign’s top line rose 12% year-over-year to $661 million, above analysts’ mean estimate of $541 million. Its earnings per share came in at 72 cents, 16 cents above the mean estimate. Its billings rose 10% YOY to nearly $675 million, versus its guidance of $615 million to $625 million.

Finally, DOCU now expects to generate revenue of $2.713 billion to $2.725 billion for its current fiscal year, slightly above its previous outlook of $2.695 billion to $2.707 billion.

 DocuSign and AI

DocuSign has an AI business called SealSoftware which it acquired three years ago. Among Seal’s capabilities are searching contracts by concepts and comparing clauses and terms. It also creates “actionable insights.” Further, DOCU intends to use ChatGPT to generate summaries of its customers’ contracts.

Its head of investor relations, Allan Thygesen, said that the company will not be hurt by chatbots like ChatGPT because of its “deep experience” when it comes to creating contracts.

The Performance of DOCU Stock

DOCU stock has climbed 2% in the last five days and 18% in the last month. However, it has still dropped 12% in the past three months and 10% in the previous 12 months.

On the publication date, Larry Ramer did not hold (directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

Larry Ramer has conducted research and written articles on U.S. stocks for 15 years. He has been employed by The Fly and Israel’s largest business newspaper, Globes. Larry began writing columns for InvestorPlace in 2015. Among his highly successful, contrarian picks have been PLUG, XOM and solar stocks. You can reach him on Stocktwits at @larryramer.

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