What Happened?
Shares of online work marketplace Upwork (NASDAQ:UPWK)
fell 2.5% in the afternoon session after ongoing concerns about competition from Artificial Intelligence (AI) and a softening labor market continued to weigh on investor sentiment.
The decline compounds a difficult year for the company, which has lost over 55% of its value since a dismal first-quarter earnings report in early May. That report featured weak second-quarter guidance and prompted multiple analyst downgrades.
Analysts, including those from UBS, cited risks of AI displacing the freelance work available on Upwork's platform, a concern that continues to affect the stock's performance.
The shares were trading at $9.52, down 3% from the previous close.
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What Is The Market Telling Us
Upwork’s shares are extremely volatile and have had 36 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 3 months ago when the stock dropped 19.6% on the news that the company’s weak revenue guidance for the upcoming quarter and full year overshadowed a strong first-quarter 2026 profit beat. The company reported revenue of $195.5 million, up 1.4% year-over-year, which was in line with Wall Street’s expectations.
Adjusted earnings per share of $0.35 comfortably beat analyst estimates by 29%. Despite the current quarter's solid profitability, investors focused on the weaker outlook. Upwork guided for second-quarter revenue of $190 million at the midpoint, falling nearly 7% below consensus. Furthermore, the company lowered its full-year revenue forecast by 8% to $775 million, signaling concerns about future growth and prompting a significant sell-off in its shares.
Upwork is down 52% since the beginning of the year, and at $9.52 per share, it is trading 57% below its 52-week high of $22.11 from January 2026. Investors who bought $1,000 worth of Upwork’s shares 5 years ago would now be looking at only $165.36.
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