Should you sell your Upwork stock?

Roth Capital analyst Rohit Kulkarni downgraded Upwork (Upwork Stock Quote, Chart, News, Analysts, Financials NASDAQ:UPWK) to “Neutral” from “Buy” in a May 8 report, cutting his target to $10.00 from $23.00 after first-quarter results showed weaker marketplace demand.

“We think macro headwinds and AI-driven displacement of low-end contracts outweigh Enterprise AI adoption tailwind,” Kulkarni said.

Kulkarni said Upwork’s full-year revenue guide was cut by about $67.5-million at the midpoint, signalling a more durable slowdown in marketplace volumes. He now expects year-over-year revenue declines for the next five quarters, lowering his 2026 and 2027 revenue forecasts by 9% and 18%, respectively.

The analyst said AI is replacing sub-$500 contracts faster than expected, creating a near-term headwind that is not yet being offset by AI-related gross services volume growth.

“However, the 1Q evidence suggests the displacement effect is currently outpacing the creation effect at the margin,” he added.

Kulkarni also said Upwork’s 24% workforce reduction adds execution risk as the company works through its Lifted enterprise transition, Uma AI assistant rollout and OpenAI partnership.

He said upside risks include faster enterprise migration, marketplace stabilization, AI data monetization, buybacks or possible activist interest, but he sees limited near-term catalysts for multiple expansion.

Kulkarni expects Upwork to generate Adjusted EBITDA of $249.1-million on revenue of $765.2-million in fiscal 2026, declining to $240.1-million on revenue of $756.6-million in fiscal 2027.

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