Investing.com -- HSBC downgraded Twilio to Reduce on Friday, saying the stock's recent rally on hopes it will benefit from Meta's Muse AI agent has left it overvalued. The bank maintained its price target at $211.

Twilio shares have climbed about 30% since Meta launched Muse on Sept. 8 and are up 182% over the past 12 months.

HSBC analyst Sameer Lam said the market is increasingly treating Twilio as the communications infrastructure behind Muse and other consumer AI agents.

"We agree with the underlying industry logic that AI agents will expand communications volumes such as calls, messages, and authentications," Lam wrote. However, he said the market overestimates how much of that value will go to Twilio.

The analyst believes Twilio's most likely role with Muse is connecting calls to regular phone numbers and sending transaction and verification messages. Rivals such as Bandwidth and Sinch offer similar services.

“We believe Meta could use Twilio, another CPaaS provider, or even connect more directly to wholesale carriers through SIP. Overall, we view the rising AI-agent traffic will benefit the industry, but it does not guarantee Twilio captures disproportionate economics,” the analyst added.

In HSBC's bull case, Muse's daily users rise tenfold and 30% of them make a five-minute call through Twilio every day.

Even then, the bank’s analysts believe Twilio would gain only about $49.2 million in revenue, or 0.8% of its fiscal 2026 estimate. That would add roughly $14 a share, about 18% of the stock's $75 gain since Muse launched.

"In our view, the opportunity cost of owning Twilio at 45.3x PE has become difficult to justify," Lam wrote.

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