Intuit Inc. (INTU) shares staged a partial recovery on Friday, gaining 3.3% to close at $395.95, as the company approaches its fiscal third-quarter earnings report covering the peak U.S. tax season. The rebound comes after a steep 6.2% decline on Thursday triggered by broader concerns that artificial intelligence could disrupt traditional software business models.
The stock's bounce brought Intuit's market capitalization to approximately $110.9 billion, outperforming peers like Adobe (ADBE), which rose 2.7%, while Paychex (PAYX) and Oracle (ORCL) ended lower. The software sector has been under pressure following selloffs in IBM (IBM) and ServiceNow (NOW), as investors reassess the competitive threat posed by AI-powered tools that could automate tasks historically handled by legacy software vendors.
Intuit's fiscal third-quarter results, due after the close on April 30, will provide a critical test of the company's ability to sustain growth amid these headwinds. The period encompasses the heart of the U.S. tax-filing season, when demand for TurboTax and Credit Karma typically peaks. Analysts polled by Barchart expect earnings of $11.13 per share, up from $10.44 in the same quarter last year.
The company has not missed Wall Street's profit estimates in the past four quarters, but the upcoming report will be closely watched for signs of resilience. Intuit projects fiscal third-quarter revenue growth of approximately 10%, with GAAP diluted EPS between $10.56 and $10.62 and non-GAAP EPS in the range of $12.45 to $12.51. The non-GAAP figure, which excludes certain accounting costs, is commonly used by software firms to highlight operating performance.
In its fiscal second quarter, Intuit reported a 17% year-over-year revenue increase to $4.7 billion, driven by gains in both Global Business Solutions and Consumer segments. CEO Sasan Goodarzi emphasized the company's investments in AI-powered and 'autonomous, done-for-you experiences' that combine technology with human expertise. CFO Sandeep Aujla highlighted sustained double-digit revenue growth and margin improvement, as Intuit maintained its full-year guidance.
However, the competitive landscape has shifted rapidly. Intuit now faces pressure not only from traditional tax and payroll rivals like H&R Block and Paychex, but also from AI assistants developed by major tech companies. Investors are questioning whether these tools could eventually handle financial tasks that have long driven customer loyalty to TurboTax, QuickBooks, and Credit Karma.
UBS Global Wealth Management's Kiran Ganesh told Reuters that the AI debate within tech is likely to drive a wider range of outcomes for the sector than investors have historically seen. This uncertainty has weighed on software valuations, with Microsoft (MSFT), Adobe, CrowdStrike (CRWD), and Datadog (DDOG) all declining on Thursday.
Intuit's concentration of tax-prep revenue between November and April adds to the stakes. The company has noted in filings that changes to filing deadlines, tax forms, or e-filing systems could significantly impact results. Additionally, if AI enables competitors to bundle tax preparation, bookkeeping, or marketing services more easily, Intuit may need to convince customers that its data, compliance features, and human support justify premium pricing.
Friday's bounce suggests investors are not abandoning Intuit yet, but the upcoming earnings report will be more than a routine seasonal check-in. It will test whether a major, profitable software company can turn AI into an advantage rather than a threat, and maintain the revenue streams that have made it a market leader.
