Why Upwork Stock Plunged Today

The sell-off might be overdone, as the downturn that drove the panic will likely be temporary.Shares of Upwork (UPWK 19.08%) sank on Tuesday after the freelancer marketplace reported a decline in active clients. By the close of trading, Upwork's stock price was down more than 19%. Image source: Getty Images. Navigating AI trends Upwork's fourth-quarter revenue rose 4% year over year to $198.4 million. The company's gross services volume (GSV) -- the total dollar value of all transactions facilitated by its platform -- increased 3% to $1 billion. Upwork is making inroads with small and midsize businesses. GSV from its Upwork Business Plus offering for SMBs increased 24% sequentially. The work marketplace is also investing aggressively in artificial intelligence (AI). AI-powered search recommendations helped boost GSV by over $100 million in 2025. Moreover, annualized GSV from AI-related work climbed more than 50% to over $300 million in the fourth quarter. ExpandNASDAQ: UPWKUpworkToday's Change(-19.08%) $-3.58Current Price$15.21Key Data PointsMarket Cap$2.5BDay's Range$14.82 - $16.9152wk Range$11.13 - $22.84Volume19MAvg Vol3.5MGross Margin77.75% Still, active clients on Upwork's platform fell 6% to 785,000. This understandably concerning decline likely spooked investors. However, during a conference call with analysts, chief financial officer Erica Gessert noted that Upwork's churn rate improved throughout 2025 -- and the company expects to report active client growth in the first quarter of 2026. Growth is set to accelerate In turn, Upwork's 2026 guidance includes: Revenue of $835 million to $850 million, compared to $787.8 million in 2025 Adjusted earnings per share of $1.43 to $1.48, compared to $1.41 "Our diversified growth path across AI, SMB, and enterprise gives us confidence in our guidance of 4% to 6% GSV growth and 6% to 8% revenue growth for the year," Gessert said.Read NextJun 27, 2022 •By Will EbiefungDown 34%, Is Upwork Stock a Buy?Mar 7, 2022 •By Rich SmithWhy Upwork Went Down 10% InsteadDec 31, 2020 •By Keith Noonan2 Great Stocks Under $100 to Buy in 2021Nov 6, 2020 •By Rick Munarriz3 Stocks That Are Killing It This WeekSep 23, 2020 •By Will Ebiefung2 Top Small-Cap Stocks to Buy Right NowMay 29, 2020 •By Rick Munarriz3 Stocks That Have Doubled and Still Have Room to GrowAbout the AuthorJoe Tenebruso is a contributing Motley Fool stock market analyst. Previously, Joe was an investment analyst for Stock Advisor, Income Investor, and Crypto Society, as well as several other market-beating investing services. He graduated summa cum laude from Rutgers University with a Bachelor of Science in Finance.tmfguardianX@Tier1InvestorStocks MentionedUpworkNASDAQ: UPWK$15.21 (19.08%) $3.58*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.