The $100 Trillion AI Story No One Is Telling You

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Today’s Exclusive Article

Guidewire’s Buyback Could Be the Clue the Sell-Off Is Ending

Written by Thomas Hughes. Originally Published: 1/16/2026. 

Guidewire Software branding over analytics dashboard, highlighting insurance tech platform and stock focus.

Article Highlights

  • Guidewire’s new $500M share buyback supports investor confidence and could accelerate its path to equity gains despite a rising share count.
  • Institutional selling in late 2025 has given way to early‑2026 accumulation, setting the stage for a potential rebound after a deep price correction.
  • Analyst sentiment remains bullish with a Moderate Buy consensus and upside forecasts driven by cloud migration, AI integration, and product expansion.

Share buyback authorizations, such as the one recently issued by Guidewire Software (NYSE: GWRE), are an important signal for investors and can influence stock movement because they reflect management’s confidence in growth and cash flow. The company authorized an additional $500 million, extending an earlier program that has now completed. That amount represents roughly 3.4% of Guidewire’s market capitalization, providing potential equity leverage in addition to a sentiment boost.

One caveat: the recent buybacks have not yet reduced outstanding shares meaningfully because share-based compensation has offset some repurchases. For 2025 overall, activity (including share-based comp) resulted in about a 1.5% increase in outstanding shares, though 2026 may change that trend. Q1 of fiscal 2026 (FY2026) saw only a 0.6% increase in the share count, and the company is continuing to grow while strengthening its financial position.

Institutions Are the Key to Unlocking Guidewire’s Share Price Rebound

I’ve seen this pattern only twice in my 46-year career… (Ad)

Warren Buffett is sitting on $344 billion, the biggest cash position of his career. Meanwhile, CEOs behind America’s most powerful tech companies are selling billions in shares even as Wall Street tells everyday investors to buy the AI dip. After 46 years tracking institutional money flows, one pattern stands out: money is leaving crowded AI trades and flooding into an ignored corner of the market. The reason is power. A single AI data center uses as much electricity as a small city, and the grid can’t handle what’s coming. Institutions are quietly loading up on companies upgrading America’s power backbone.See the stocks flagged to lead the next leg of this market.

Guidewire experienced a painful price correction in Q4 2025, with the stock falling roughly 30% from its highs. MarketBeat data show that much of this was a natural profit-taking cycle that became overextended and is now poised to reverse. The Q4 selling pressure was primarily institutional; institutions (including hedge funds) — which account for the vast majority of ownership — sold heavily through 2025, coinciding with the market top.

The most likely trigger for a rebound is a reversion from distribution back to accumulation, a shift that appears to have begun. MarketBeat’s data show institutional buying of GWRE in the first two weeks of 2026, and that activity will likely accelerate as Q1 FY2026 progresses.

Valuation concerns contributed to the sell-off. At the 2025 peak the stock traded at about 65x current-year earnings and still changed hands near 58x in early 2026. Those multiples imply expectations of robust growth, and investors may remain cautious until that growth proves durable.

Guidewire’s Q1 FY2026 results delivered both top- and bottom-line beats, accelerated earnings growth, and a favorable outlook for the year. If the company continues to execute on its go-to-market strategies, there appears to be upside: investors can reasonably expect a sustained, bullish analyst revision cycle. At a modest multiple on forward earnings, the stock has room to close the gap with insurance-related peers and potentially more broadly with higher-quality tech names.

Analysts Agree Guidewire Software Looks Undervalued in Early 2026

Analyst responses to the Q1 FY2026 report were mixed — including one price-target cut, two reaffirmations, one price-target increase, and an upgrade — but the overall takeaway is constructive. Consensus among 17 analysts is a Moderate Buy, with a roughly 70% buy-rating bias and meaningful conviction behind the consensus target. Current consensus estimates imply roughly 60% upside versus the stock’s trading level.

Key 2026 catalysts for Guidewire include accelerating cloud migration, ongoing AI integration and new product development, and an expanding partner ecosystem. Cloud adoption is gaining momentum across verticals and supports the company’s revenue runway. AI features are especially appealing to insurers, who can realize operational and customer-facing efficiencies. On the partner front, Guidewire removed education fees in 2025, which has accelerated the number of platform-certified professionals and should increase platform stickiness over time.

Oversold Signals Suggest Guidewire Is Near a Turning Point

Price action in 2025 and early 2026 pushed GWRE down toward the $170 level, bringing it into alignment with its longer-term moving averages. Technical indicators such as the MACD and stochastic readings suggest the stock is deeply oversold at these levels, which coincide with the low end of analysts’ expectations and point to a potential rebound. The primary risk is a break below key support, which could extend the sell-off toward $150 before any recovery.

GWRE stock chart shows sharp sell-off to support, with oversold stochastics and weak MACD suggesting rebound setup.

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Published by RJ Hamster

I was born on 6 August 1956 in San Francisco, California to Janet and (the late) Richard Hovis. I grew up in Santa Monica, California where I attended elementary, junior high school, and high school (graduating in 1974), in addition to involvement in sports and recreation (Little League +, the Boy’s Club ++). Further, it was in elementary school – St. Augustine’s By-the -Sea Parish School that I found, and made the choice to truly journey with God. I attended Arizona State University from 1974 to 1977 – seeking to become an architect, however, I was not accepted, and, as such, I graduated with a Liberal Arts degree. Upon graduation from Arizona State University, I attended Cal Poly San Luis Obispo and studied City and Regional Planning at the Master’s level. I successfully completed one (1) year in a two (2) year program – I did not complete the Master’s degree in City and Regional Planning – due to personal reasons. I returned to Santa Monica where I started (October 1979) my career as graphic designer with Exxon Company, USA. I spent five years with Exxon Company, USA. While working with Exxon Company, USA I was accepted into architectural school – Sci-Arc in Southern California, however, I did not attend preferring to stay with Exxon.. In 1982 I married Laura Flosi and in April 1983 we had our one and only child – Lauren Alain Hovis – a gift from God. We moved to Phoenix, Arizona in 1984 from Los Angeles, where I went to work as a graphic designer with Kitchell CEM (from 1985 -1987). From 1987 – 1995 I was an independent contractor, and a registered representative in mortgage finance, financial management, graphic design, and drafting. Further, I attended the University of Phoenix and successfully obtained a Master’s in Business Administration (MBA) in 1982. I was also a member of the Scottsdale Jaycees, where I became very involved in community events and projects. In 1994, I accepted a cartography position with the Defense Mapping Agency in Reston, Virginia. As such, I relocated from Phoenix to Reston. In 1998, I was accepted and worked as a Visual Information Officer with the Central Intelligence Agency. In 2002, I worked as a Support Officer until my retirement (due to a need for shoulder surgery) in September 2018. Away from my Federal Government service, I have been involved in various organizations and activities in Northern Virginia. In November of 2011, I married Rebecca Ouellette in Santa Monica, California. I reside in San Tan Valley, AZ with my two hamster - Jess and Timothy, our fish, our lizard - RJ Lizard., and our cats - Pearl and Grey. As to hobbies, I enjoy playing sports, attending sporting events, mentoring individuals from financial management to hamsters, building models, photography, travel, multimedia design, managing partner for RJ Hamster, and jazz – smooth jazz to a samba or a bossa nova. Love and God Bless, Peter – aka RJ Hamster Jo hi

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