Twilio (TWLO) shares rose as much as 21% on Friday after first-quarter results were released after hours on Thursday. The stock reached $179.48 at the open, its highest level in four years, as Q1 revenue growth came in at 20% year on year.
The wider US market was also supported by earnings from Apple (AAPL) and reports that Iran sent an updated peace deal to intermediaries in Pakistan. US Oil (WTI) fell 4%, which supported equities.
For the quarter ended 31 March, Twilio posted adjusted EPS of $1.50 versus a $1.27 consensus estimate. Revenue rose to $1.41 billion, about $70 million above consensus.
For Q2, the company forecast revenue of $1.425 billion, $35 million above consensus, and adjusted EPS in line with the prior $1.29 consensus. Twilio raised its full-year free cash flow midpoint to $1.09 billion from $1.05 billion.
Wells Fargo lifted its price target to $200 from $147, while RBC Capital kept an Underperform rating and raised its target to $120 from $100. The monthly chart shows support near $150, and the monthly RSI is approaching 65, below the 70 overbought level.
Looking back, we remember the significant spike in Twilio’s stock in the spring of 2025 following its impressive first-quarter earnings report. That period was defined by its highest revenue growth in three years and the early excitement around its Voice AI story. The stock surged to a four-year high, riding a wave of analyst upgrades and broad market optimism.
That bullish momentum carried the stock to Wells Fargo’s $200 price target by the third quarter of 2025, rewarding traders who bought call options. However, the stock has since consolidated and is now trading around $165, a pullback of over 17% from its 2025 peak. This consolidation comes as the market digests a more challenging macroeconomic environment.
Recent data from Q1 2026 showed revenue growth moderating to a still-healthy 12%, as the company now faces tougher year-over-year comparisons from its stellar 2025 performance. Furthermore, the latest US inflation print came in slightly hotter than expected at 3.1%, renewing concerns about Federal Reserve policy and putting pressure on growth stocks like Twilio. These factors have contributed to the stock’s recent range-bound trading.
Implied volatility on Twilio options has recently increased to near 45%, up from a low of 35% earlier this year, suggesting the market expects larger price swings ahead of its next earnings call. This makes strategies like selling cash-secured puts at the $150 strike price attractive, as this level represented a significant support area back in 2025 and now offers a healthy premium. The goal here is to either collect income or acquire the stock at a price level that has proven historically strong.
For those who believe the Voice AI narrative still has room to run, buying call spreads could be a prudent approach. A bull call spread, such as buying the July $170 call and selling the July $185 call, would cap potential gains but significantly reduce the upfront cost in this high-volatility environment. This strategy offers a defined-risk way to bet on a rebound toward last year’s highs.
We are also watching the price of WTI crude oil, which has climbed back to $85 per barrel, unlike the drop we saw this time last year that provided a tailwind for equities. The current commodity strength is a headwind, acting as a tax on the consumer and businesses. Any sign of easing energy prices could quickly reignite interest in tech growth stories, making near-term call options a compelling tactical play.
