UiPath (PATH) saw continued agentic AI traction in fiscal Q2, with AI and agentic tools driving more deals than the company's traditional automation offerings, Truist Securities said in a note Thursday.

Apart from business stability and the sustained growth of its agentic AI offering, Truist also noted UiPath's deeper partnership relations in Q2 and improving pipeline quality. The company also bagged a "key government win" in the quarter amid normalizing buying patterns in the US public sector, the investment firm added.

"We will watch closely as these developments unfold and remain cautious as we look for continued solid execution signals and a growth inflection before becoming more constructive," Truist said.

The company reported "solid" fiscal Q2 results, but operating cash flow of $41.6 million was below Truist's estimate of $53.4 million and consensus of $43.6 million, according to the note. Free cash flow of $41.6 million also missed Truist's forecast of $51.5 million, the note added.

Truist Securities lowered its price target on UiPath stock to $12 from $13, while reiterating its hold rating.

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