Five9 FIVN shares have dropped 42.8% year to date (YTD), underperforming the Zacks Computer and Technology sector’s decline of 12.5% and the Zacks Internet – Software industry’s fall of 11.1%.

FIVN has underperformed its industry peers, StoneCo STNE, BlackBerry BB and Affirm AFRM.

Over the same time frame, StoneCo shares have risen 37.8%, while BlackBerry and Affirm shares have lost 16.9% and 33.1%, respectively.

This underperformance raises the question of whether investors should cut their losses and exit or view the dip as a compelling entry point. Despite near-term challenges, the company’s long-term growth trajectory remains strong, suggesting opportunities for investors.

Why Did FIVN Underperform?

Five9’s recent decline stems from a mix of broader market weakness and company-specific concerns. A widespread sell-off in tech stocks, triggered by fears of escalating trade tensions and slowing economic growth, has put pressure on the entire sector.

Growing uncertainty around the adoption of artificial intelligence (AI) is adding complexity to enterprise decision-making. This hesitation is adding complexity to the buying process and can delay customer acquisitions or expansion deals, raising questions about the pace and durability of Five9’s growth in the AI-driven contact center space.

However, the company’s strong focus on AI innovation, platform scalability and partnerships continues to strengthen its competitive positioning and support long-term growth potential.

Five9’s Growth is Backed by AI Advancements & Partnerships

FIVN is strengthening its position in AI-driven customer experience solutions by continuously launching products with advanced capabilities. Over the past few months, the company has launched multiple AI-enabled solutions, including Spotlight and Five9 AI Agent.

Spotlight is designed to help companies utilize Generative AI (GenAI)-powered insights and access contextual data faster, reduce manual work and make data-driven decisions. The Five9 AI Agent will help businesses create chat and voice bots that combine the conversational abilities of a human with the speed and extensive knowledge of AI.

Five9’s sustained focus on enhancing product capabilities is driving its Enterprise AI revenues, which grew 46% year over year in the fourth quarter of 2024. AI now accounts for 9% of enterprise subscription revenues, reflecting rising customer adoption. The momentum is underscored by a nearly 50% year-over-year rise in AI-related bookings from new enterprise customers, signaling sustained demand and a robust trajectory for long-term growth.

FIVN continues to build on the strength of its strategic alliances. The company has been seeing substantial opportunities in 2025, following high-impact collaborations with industry leaders such as Salesforce, ServiceNow, Microsoft, Verint and Google. These partnerships not only enhance Five9’s ecosystem and market reach but also position the company to capitalize on the growing enterprise demand for integrated, AI-powered customer experience solutions.

Partnerships with leading technology providers are enhancing AI-driven customer experience (CX) and employee experience solutions through deeper integration, modernized deployment and global accessibility. These alliances are accelerating customer acquisition, expanding market reach and reinforcing leadership in next-generation intelligent experience platforms.

FIVN Provides Positive 2025 Outlook

For 2025, Five9 anticipates revenues of $1.140-$1.144 billion, reflecting confidence in sustaining growth through AI integration and platform expansion. The Zacks Consensus Estimate for revenues is pegged at $1.14 billion, indicating a year-over-year rise of 9.79%.

Non-GAAP earnings for 2025 are expected to be $2.58-$2.62 per share. The consensus mark for earnings is pegged at $2.61, unchanged over the past 30 days, indicating a year-over-year increase of 5.67%.

FIVN’s earnings beat the Zacks Consensus Estimate in the trailing four quarters, delivering an average earnings surprise of 18.55%.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

Conclusion: Buy Five9’s Stock Now

Despite macroeconomic headwinds and prolonged sales cycles, FIVN's strong AI momentum, deepening partnerships and expanding global reach underscore its long-term growth potential. Continued innovation in AI-driven CX solutions and robust enterprise adoption position the company favorably, helping offset short-term challenges and reinforcing confidence in its strategic direction and market leadership.

Five9 currently has a Zacks Rank #2 (Buy), which implies that investors should start accumulating the stock now. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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