Dear Twilio Stock Fans, Mark Your Calendars for October 6

Twilio (TWLO) is making history this week. The cloud communications company will join the S&P 500 ($SPX) before the opening bell on Tuesday, Oct. 6, replacing Warner Bros. Discovery (WBD) in the most widely followed benchmark for U.S. stocks.

And it should be a catalyst for Twilio’s stock price. More than a dozen exchange-traded funds and hundreds of conventional index mutual funds follow the S&P 500, so when Twilio comes on board, each will buy Twilio as they adjust their holdings. 

Why Does S&P 500 Inclusion Matter for Twilio Stock?

The S&P 500 is composed of the 500 largest companies in the U.S. and is arguably one of the best barometers of the health of the stock market. Stocks in the index represent about 80% of U.S. stock market capitalization, so investors, economists, and policymakers closely watch the index. Trillions of dollars are invested in funds that track the S&P 500, so it's particularly significant when a company joins for the first time.

Twilio’s spot in the index is opening thanks to the merger of Paramount Skydance (PSKY) and Warner Bros. Discovery, which is expected to be completed on Oct. 6. Paramount and Warner Bros. Discovery are both members of the S&P 500, and the new company will be called Skydance, with the ticker SKYD replacing PSKY to represent the newly merged company. WBD shareholders will receive about $31 for each share of WBD stock they own.

Twilio is moving up from the S&P MidCap 400, which tracks 400 midsize U.S. companies. (FormFactor (FORM) will take Twilio’s spot in the midcap index.)

About Twilio

Twilio has been a strong performer as of late, thanks to its ability to tap into the growth of artificial intelligence. Twilio is a platform-as-a-service (PaaS) company that provides cloud-based software that allows businesses to communicate with customers through email, phone calls, text messages, and other digital channels. The company’s voice AI and software offerings include software add-ons such as Branded Calling and Conversational Intelligence. And it’s showing particular strength in improving customer engagement in enterprise and AI-native businesses. 

It’s gotten a big boost recently on the strength of Meta Platforms (META) and its new AI agent, Muse, which has been considered a new opportunity for Twilio. “AI agents have the ability to drive significantly higher communications flows, unlocking incremental demand for Twilio core texting/voice WhatsApp rails,” TD Cowen analyst Derrick Wood wrote in a research report.

Revenue in the second quarter was $1.5 billion, up 22% from a year ago. Gross profits were $725.9 million, up 20% from last year, and net income was $6.68 per share versus $0.14 per share in Q2 2025, thanks to a one-time, noncash tax benefit of $5.91 per share.

Income from operations was $85 million, up 129% from a year ago, and the company’s free cash flow was $353 million.

“We are in a powerful new chapter at Twilio, marked by another quarter of organic growth acceleration as well as record profitability and free cash flow,” CEO Khozema Shipchandler said. “At SIGNAL (the company’s annual conference for developers), we unveiled a revamped Twilio platform giving customers the building blocks they need to power rich, lifelong conversations. In a world where humans and AI agents increasingly work side by side, Twilio is providing the infrastructure to power them both.”

The platform, which includes tools such as Conversation Organizer and Conversation Memory, is designed to help businesses coordinate customer interactions and preserve context for both humans and AI agents.

Twilio shares are up more than 105% this year and have risen by 180% in the past 12 months.

What Do Analysts Expect From TWLO Stock?

Analysts believe that Twilio is far from finished—TWLO stock carries a consensus “Strong Buy” recommendation from 28 analysts who cover the stock, with 23 recommending investors buy and only one with a “Sell” rating. The mean price target is lower than Twilio’s current stock price—an indicator of how quickly the stock has increased in recent weeks—but analysts are still in the process of shifting their price targets. In late September, Stifel Nicolaus moved its price target from $275 to $300; TD Cowen increased its target from $260 to $300; and Rosenblatt Securities increased its target from $275 to $290.

Notably, however, HSBC analyst Sameer Lam lowered his price target to $211 on Sept. 24, warning that Muse’s popularity won’t necessarily impact Twilio’s bottom line.

While analysts may be split on Twilio’s ability to capitalize on Muse specifically, it’s clear that the company’s growing AI software platforms are gaining in popularity. With the company getting another catalyst on Oct. 6 with its inclusion in the S&P 500, TWLO stock looks like an appealing pick right now.

On the date of publication, Patrick Sanders did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.