The Gig Economy Stock Riding an AI Wave to Record Results

30‑Second Take

Why now? Upwork revealed record profit and revenue results in its Q1 earnings report (released May 5).

Net income doubled to $37.7 million year-on-year, with $56.0 million in adjusted EBITDA and a new high of 29% adjusted EBITDA margin. 

Revenue was also at a record high, topping $192.7 million, the equivalent of a 1% year-on-year growth with record gross margins of 78.3%. 

The platform is now heavily pivoting into AI and has set itself apart as the number 1 destination for A1 talent and job openings.

AI is the core component of a three-pronged growth plan, with new Enterprise products for larger companies and additional ads and monetization plans set to power the platform to even stronger results in 2026 and beyond. 

UPWK stock is good value right now and could be a smart addition to a longer-term portfolio for investors seeking triple-threat investments.

Trade Setup

Time frame: Swing to medium-term
Edge type: Momentum breakout

Snapshot Table

Chart

5-Day Synopsis: Trading has been bumpy throughout the last five sessions, with ongoing peaks and troughs seeing UPWK trade above $14.00 before sliding back to current levels. 

This activity has been driven by various forces, including new institutional positions - Robeco Institutional Asset Management confirmed the addition of 142,073 UPWK shares on July 2.

Helping to power the upswing, Upwork also confirmed some board changers earlier in the week and the creation of a new Advisory Council. 

We’re also seeing an element of technical consolidation around support and resistance zones following May’s strong earnings release.

Bull Case 

Core thesis: Headquartered in the tech heartland of Palo Alto, California, Upwork was created with a mission to transform how the world works.

It connects independent freelancers with businesses seeking remote talent across more than 10,000 skill sets. 

Founded in 2013 and formerly known as Elance-oDesk, Upwork’s platform has so far generated more than $25 billion in economic opportunity for talented gig workers around the world.

It’s the largest platform of its kind, and connected more than 830,000 businesses with independent workers in more than 180 countries in 2024. 

Catalysts: Upwork has embraced the introduction of AI with the creation of multiple AI tools, including its own AI tool, Uma, Mindful AI™.

Uma helps businesses identify the best talent matches (around 70% of Upwork businesses used it to create job ads in 2024), and provides tools to help freelancers craft stronger proposals. 

In the future, Uma will power entire work outcomes.

Becoming a leader in AI is a savvy move for Upwork, given many industries lack AI capability and expertise. By stepping into that space, it’s positioned for strong growth. 

Over 64 million Americans – the equivalent of 38% of the workforce – freelanced in 2024 according to Upwork figures.

With that number growing year-on-year, and more cost-conscious businesses looking to plug talent gaps and access needed skills without the pressures of payroll, Upwork is on track to continue its recent run of form.

Valuation upside: Analysts see UPWK stock reaching a high of $25.00. The lowest estimates fall at $15.00 exactly, with an average price target of $19.10. 

Technical tailwind: Strategic AI and board updates are offering positive tailwinds, with technical indicators pointing to support around $13.44 and resistance near $14.57.

Bear Case 

Key risk: While Upwork was founded on a vision to change how people work and give them back control of their 9-to-5, AI could single handedly render that mission obsolete.

AI tools like ChatGPT are increasingly capable of automating tasks previously done by freelancers—especially in areas such as writing and translation.

If clients choose to use AI rather than pay for Upwork’s services, Upwork’s Gross Services Volume (GSV) and revenue growth could slow.

It’s also worth noting that while revenue has grown, profitability remains a challenge, especially with Upwork’s ongoing and growing investment in AI, compliance, and platform safety tools. 

Macro/sector headwinds: Regulatory and compliance issues are an ongoing headwind for platforms like Upwork, with many nations seeking to reclassify freelancer or gig economy workers as employees.

Any changes in labor laws to amend freelancer classification or global taxation rules could increase compliance costs or reduce the appeal of gig economy platforms. 

Competitive threat: Upwork isn’t the only gig economy platform for freelancers.

FIVERR is a serious competitive threat, and it too is exploring how it can use AI tools to make its offering more attractive to enterprise clients.

If they prove to be more innovative, or better meet the needs of businesses and freelancers, Upwork’s customer base could quickly switch allegiance. 

Crowded-trade concern: With rising competition and AI disruption threatening long-term relevance, even modest user churn figures or margin pressure could trigger sharp selloffs.

Quick Checklist 

✅ Thesis still valid after today’s close
✅ Volume confirms move above key levels
✅ Catalyst date double-checked (July 03, 2025)

Deep‑Dive Links

• Q1 2025 Earnings Report 

• Analyst Ratings and Price Targets

• Short Interest Data

• Company Profile and Investor Relations

That’s all for today’s Everyday Alpha. We’ll have a new pick for you every morning before the market opens, so stay tuned!

Best Regards,
—Noah Zelvis
Everyday Alpha