DocuSign’s stock has risen by over 7% in premarket trading, reaching $62.85, as its latest earnings report shows signs of stabilization after facing a post-pandemic slowdown. The company’s long-term prospects could be strengthened by artificial intelligence (AI). While AI models such as ChatGPT could be considered a threat to DocuSign’s business, executives feel that their clients will continue to turn to DocuSign for its specialized contract services.
Allan Thygesen, the head of investor relations at DocuSign, stated that with experience built over years of designing agreement-specific models, their services are more than mere high school essay drafting. The company has already integrated AI into its processes as it acquired Seal Software and its analytics tools for $188 million in 2020. DocuSign also announced it would use Microsoft‘s OpenAI technology to create summaries of agreements.
RBC Capital Markets analysts reiterated their Sector Perform rating and a $59 target price for DocuSign, citing it is premature to judge the potential success of its innovation while dealing with macroeconomic headwinds. Generative AI could push more customers towards using DocuSign’s contract lifecycle management products, which are designed to manage contracts over the longer term.
DocuSign executives feel positive about potential increased use of their services due to AI and other technological advancements. The company’s utilization of AI to improve products could see growth in the contract management industry. However, the future impact of technologies such as ChatGPT is still uncertain.
