DocuSign Stock Sinks as AI Hype Sparks Doubts

DocuSign ( (DOCU) ) has fallen by -16.98%. Read on to learn why.

DocuSign shares have fallen 16.98% over the past week, as investors reassessed the company’s position in a fast-changing, AI-driven software market. The drop came despite the launch of an AI-enhanced version of its eSignature service, designed to simplify complex legal agreements for signers and automate contract preparation for businesses. The new tools, powered by DocuSign’s Iris AI engine and trained on contract-specific data, aim to cut signer delays and remove much of the “busywork” in setting up agreements, with initial capabilities rolling out in the U.S., UK, and Australia.

The market reaction has been cautious rather than enthusiastic, reflecting concerns that DocuSign may not be fully insulated from AI disruption and rising competition. RBC Capital analyst Rishi Jaluria recently maintained a Hold rating on the stock while cutting his price target from $95 to $70, citing worries that companies perceived as “less prepared” for AI could remain under pressure as the narrative that “AI is the death of software” persists. Technical indicators have also turned negative, with a Sell signal despite DocuSign’s modest year-to-date price performance near flat and a current market capitalization around $13.8 billion.

Even with the recent 16.98% slide, Wall Street’s view of DocuSign remains mixed rather than outright bearish. The stock carries a Hold consensus rating from analysts, with an average price target in the $80s that still implies notable upside from current levels, and some voices, like Jefferies’ Brent Thill, continue to see meaningful long-term potential. Investors are watching closely to see whether DocuSign’s AI initiatives and its push toward more predictable recurring revenue can offset competitive pressure and restore confidence in the growth story. Upcoming investor meetings and conference appearances could be key catalysts in shaping sentiment after a volatile week for the shares.