Autodesk Stock Rally: Why Momentum May Not Be Done Yet

Key Points

• As most SaaS companies start to suffer from AI commercialization, Autodesk stands out with one big moat around it for future growth potential.
• Markets are rewarding this setup, with analysts boosting their valuations higher.
• Institutions are buying in after the company's quarter, pointing to a brighter future.

Being a software as a service (SaaS) stock in today’s market has got to be one of the toughest positions to be in, especially for the shareholders who find themselves with some of those names in their portfolios. Rightly or wrongly, the market had placed shares of Autodesk Inc. NASDAQ: ADSK in that losing bucket for a few months, until common sense (which isn’t so common) stepped back into the scene.

With artificial intelligence being commercialized, anyone with a ChatGPT subscription and a few days of work can replicate some of these software services and applications, perhaps not on a grand scale, but for personal use. That availability is a direct threat to some of these technology stocks, but not for Autodesk, and here’s why.

Since the company offers its services to various sectors, including construction, automotive, manufacturing, and more, regulations are in place that prevent freelance and makeshift applications from replacing this company. That is a direct moat in today’s digital economy, and something a younger version of Warren Buffett could be excited about.

Autodesk Rallies on Earnings, Markets Get Checked

Although the idea of this SaaS entering ex-growth is plausible, the competitive advantage surrounding Autodesk has become very obvious. While the market was only expecting to see $2.12 in earnings per share (EPS) from the company’s latest quarterly earnings, Autodesk managed to beat with $2.17 instead.

It wasn’t just the fact that they beat, but also that they reported aggressive expansion across all of the company’s key performance indicators (KPIs) to reiterate the fact that this company won’t be affected by the artificial intelligence commercialization wave.

Some of these KPIs include revenue growth of 18% over the year, but it’s what’s behind this growth that really matters. Billings reached $1.7 billion (36% higher than last year), indicating that customer count isn’t only growing, but the amount paid by each customer is also rising, pointing toward higher adoption rates.

Moreover, international revenue grew by double digits across the board, indicating that no overseas competitors can replicate the regulatory hurdle-jumping and tight operating efficiency that Autodesk has achieved as of today. This provides another green check for investors looking to win in this artificial intelligence race.

All told, one of the most vital metrics for any business, free cash flow, expanded massively over the past 12 months. Reporting $451 million for the quarter represents a significant jump of 122% compared to the same quarter last year, and there are a few benefits that come along with free cash flow.

First, it gives management the ability to reinvest back into the business and its growth, so investors can keep expecting these high levels of efficiency and expansion. Second, it opens up the way for shareholder reward programs like stock buybacks, which will really top the compounding effect off.

What Investors Can Expect From Autodesk

This answer shouldn’t be too far from what other market participants are already thinking, considering all of the bullish evidence that has been presented from Autodesk recently. Wall Street analysts see the stock as a Moderate Buy now, valued at $355.2 per share, to call for approximately 12% additional upside potential (even after a 9% rally after earnings).

However, one of the most expected things ended up becoming reality. A few analysts, such as Matthew Hedberg from The Royal Bank of Canada and Taylor McGinnis from the UBS Group, took it upon themselves to give retail investors a more realistic approach to this high-growth moat business.

Hedberg considers Autodesk stock to resemble an Outperform rating with a $380 price target, aligning closely with McGinnis’ Buy recommendation at $385 per share. These views would offer shareholders, both existing and potential, a chance to squeeze another double-digit rally out of Autodesk stock in the coming months.

This time, the fundamentals align perfectly, both on a company level as well as the industry level, which might have been enough reason for savvy institutional investors to come in and join the race. Those from AQR Capital Management decided to boost their Autodesk holdings by 68.9% as of mid-August 2025, right before the company’s earnings were released.

After this new allocation, the group’s entire position is now valued at $297.5 million, making AQR the largest institutional holder of Autodesk stock so far this quarter. Even though this new buy was relatively aggressive, it is still only a drop in the bucket, considering that $2.8 billion more worth of Autodesk stock was bought in this period as well.