Doximity, Inc. operates a digital platform for medical professionals in the United States. Its Doximity platform features a personalized newsfeed with clinical and professional content, including medical articles, clinical trials or research results in video format, peer updates and accomplishments, clinical discussions, Op-Med articles, and sponsored content from pharmaceutical manufacturers and health systems. The company also offers workflow tools such as Ask, a HIPAA-compliant AI assistant; Scribe, a HIPAA-compliant AI-powered clinical documentation tool; telehealth tools for hospitals and health systems; and AMiON, an on-call scheduling tool. It primarily serves physicians, nurse practitioners, physician assistants, medical students, pharmaceutical manufacturers, and healthcare systems. The company was formerly known as 3MD Communications, Inc. and changed its name to Doximity, Inc. in June 2010. Doximity, Inc. was incorporated in 2010 and is headquartered in San Francisco, California.
Doximity's AI Bet Pays Off With Blowout Quarter, But Margins Shrink
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Blowout Q1 earnings and raised guidance Doximity reported fiscal Q1 revenue of $156.6 million, beating the $151.7 million consensus, and raised its full-year targets. The stock soared 66% in premarket trading. This directly boosts the share price because it shows the business is growing faster than expected and management is confident enough to raise guidance.
This is the single biggest new event of the period and the main reason DOCS moved sharply higher.
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AI investments show strong returns CEO Jeff Tangney said AI prompt volume grew over 25% quarter-on-quarter and AI Scribe users jumped tenfold year-over-year. An independent study found Doximity's AI assistant had the lowest clinical error rates. This supports the stock because it shows the company's heavy AI spending is producing real user growth and a competitive edge.
It explains why investors are optimistic about the AI strategy despite near-term costs.
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AI spending squeezes profit margins Adjusted gross margin fell 300 basis points to 88% due to higher AI compute costs, and management expects adjusted EBITDA margin to drop to 47% for the year. This pressures the stock because it means profits are shrinking even as revenue grows, and the company expects the spending to continue.
It is the main counterweight to the positive AI news and a key reason the stock doesn't just go straight up.
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AI Search and clinical AI adoption accelerate Doximity's AI Search business onboarded its first cohort across more than two dozen programs, and quarterly active workflow prescribers rose over 30% year-over-year, with 165 signed health-system AI clients. This lifts the stock because it shows new AI products are gaining traction and opening a multibillion-dollar market beyond the core physician network.
It provides concrete evidence that the AI pivot is translating into new customers and revenue streams.
Q3 2026
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Doximity's AI Bet Pays Off With Blowout Quarter, But Margins Shrink
▲
Blowout Q1 earnings and raised guidance Doximity reported fiscal Q1 revenue of $156.6 million, beating the $151.7 million consensus, and raised its full-year targets. The stock soared 66% in premarket trading. This directly boosts the share price because it shows the business is growing faster than expected and management is confident enough to raise guidance.
This is the single biggest new event of the period and the main reason DOCS moved sharply higher.
▲
AI investments show strong returns CEO Jeff Tangney said AI prompt volume grew over 25% quarter-on-quarter and AI Scribe users jumped tenfold year-over-year. An independent study found Doximity's AI assistant had the lowest clinical error rates. This supports the stock because it shows the company's heavy AI spending is producing real user growth and a competitive edge.
It explains why investors are optimistic about the AI strategy despite near-term costs.
▼
AI spending squeezes profit margins Adjusted gross margin fell 300 basis points to 88% due to higher AI compute costs, and management expects adjusted EBITDA margin to drop to 47% for the year. This pressures the stock because it means profits are shrinking even as revenue grows, and the company expects the spending to continue.
It is the main counterweight to the positive AI news and a key reason the stock doesn't just go straight up.
▲
AI Search and clinical AI adoption accelerate Doximity's AI Search business onboarded its first cohort across more than two dozen programs, and quarterly active workflow prescribers rose over 30% year-over-year, with 165 signed health-system AI clients. This lifts the stock because it shows new AI products are gaining traction and opening a multibillion-dollar market beyond the core physician network.
It provides concrete evidence that the AI pivot is translating into new customers and revenue streams.
News & notes movingDOCS
United States
Artificial Intelligence
Doximity Launches Bedside Bench AI Benchmark, Tops Frontier Models in Clinical Testing
Doximity launched Bedside Bench, an open-source benchmark designed to evaluate clinical-grade AI using realistic bedside scenarios, and independent testing by Fireworks ranked its Doximity Ask system ahead of several frontier models. The results reinforce the clinical credibility of Doximity Ask, which the company sees as central to keeping physicians engaged on its platform and attractive to pharma and health system advertisers. The launch arrives alongside a new securities class action that raises nearer-term risk around disclosure practices and ad-driven growth, adding to existing concerns over pharma budget exposure and Newsfeed monetization. Doximity's narrative projects $793.7 million in revenue and $198.5 million in earnings by 2029, requiring 6.6% yearly revenue growth and a $31.5 million earnings increase from $167.0 million today, with a $29.78 fair value implying 12% upside to the current price. Some of the lowest ranked analysts were already projecting only about 4.4 percent annual revenue growth to roughly US$733,800,000 and shrinking margins, a more cautious view that could shift further once Bedside Bench and the new lawsuit are fully reflected.
Enterprise Software Stocks Surge on AI-Driven Earnings
Shares of enterprise software companies, including Amplitude, GitLab, Doximity, Freshworks, and Sprinklr, soared in afternoon trading after quarterly earnings and upbeat commentary indicated that artificial intelligence is boosting software adoption rather than disrupting legacy models. The sector-wide rally was fueled by strong results from Salesforce, CrowdStrike, and Okta, with Salesforce's AI-powered Agentforce reaching $1.5 billion in annual recurring revenue and Slackbot surpassing 1 million active users within five months. CrowdStrike CEO George Kurtz attributed momentum to AI expanding the attack surface, while Okta reported that AI-focused offerings drove about 30% of new bookings and increased average contract values by roughly 40%. Amplitude jumped 9.4%, GitLab rose 8%, Doximity gained 3.3%, Freshworks climbed 5.4%, and Sprinklr advanced 7.2%, with Salesforce surging 20%.
Doximity's AI Push Drives Growth but Pressures Margins
Doximity is accelerating investments in artificial intelligence to expand beyond its core physician engagement platform, with its AI Search business onboarding a first cohort across more than two dozen programs and driving an increase in fiscal 2027 revenue guidance. The company's clinical AI adoption is growing rapidly, with quarterly active workflow prescribers up more than 30% year over year and 165 signed health-system AI clients, including eight top Honor Roll hospitals. However, adjusted gross margin declined 300 basis points year over year to 88% in the first quarter due to higher AI compute costs, and management expects elevated AI spending to continue throughout fiscal 2027, with adjusted EBITDA margin guidance of 47%. Doximity's full-year revenue guidance of $671 million to $681 million represents only 5% growth at the midpoint, reflecting a sluggish pharmaceutical advertising market, while its top 20 customers achieved 112% net revenue retention and 127 customers generating over $500,000 annually accounted for 83% of total revenues. The Zacks Consensus Estimate for fiscal 2027 revenues is $675.7 million, implying 4.8% growth, and adjusted EPS is pegged at $1.33, a 12.5% decline from the prior year.
Doximity President Sells Shares to Cover Tax Withholding
Doximity president Steven L. Zatz disposed of 4,482 shares of Class A Common Stock on August 15 in a non-discretionary sell-to-cover transaction to satisfy tax withholding requirements upon vesting of restricted stock units. The sale, valued at $111,154 based on a weighted average price of $24.80, leaves Zatz with 51,864 directly held shares worth approximately $1.29 million. The filing follows a July 22 grant of 150,000 options with a $20.49 strike price that do not begin vesting until July 2027, aligning his compensation with future stock appreciation. Doximity reported June quarter revenue of $156.6 million, up 7%, but gross margin fell to 87.5% from 91.2% due to higher AI compute costs, and adjusted EBITDA declined 6% to $74.8 million.
Truist Lifts Doximity Target to $24 and Stays on Hold
Truist Securities raised its price target on Doximity to $24 from $19 while reiterating a Hold rating. The firm now projects revenue of $673 million in fiscal 2027 and $716 million in fiscal 2028, up from prior estimates of $664 million and $695 million. Adjusted EBITDA was trimmed to $320 million for fiscal 2027 from $323 million, while fiscal 2028 nudged up to $347 million from $344 million. The $24 target is based on 10 times Truist's calendar 2028 adjusted EBITDA estimate, rolled forward to an 18-month target. Doximity shares rose 0.46% premarket and are up roughly 14% over the past week but still down about 60% over the past year.
Doximity Fair Value Estimate Rises 15% to $28 Amid Split Analyst Views on AI Growth
Simply Wall St has raised its fair value estimate for Doximity to US$28.00 from US$24.37, a 15% increase driven by slightly higher revenue growth and net margin assumptions. The updated model reflects a revenue growth rate of 6.26%, up from 5.93%, and a net profit margin of 27.95%, up from 27.68%, while the forward P/E is essentially unchanged at 24.58x and the discount rate edges up to 8.06%. The revision comes amid a split among Wall Street analysts: bullish firms like Needham and Raymond James have raised price targets to US$41 and US$38, citing a solid Q1 report and early AI traction, while bearish firms including BofA, Wells Fargo, and Jefferies have issued downgrades or lower targets, pointing to limited visibility, execution risk, and tougher competition.
Doximity Raises Revenue Outlook on Clinical AI Adoption
Doximity raised its revenue outlook for the second quarter and full fiscal year 2027, citing rapid uptake of its clinical AI tools. The company now expects second-quarter revenue between US$170 million and US$171 million, and full-year revenue between US$671 million and US$681 million. This follows fiscal first-quarter revenue of US$156.62 million, up from US$145.91 million a year earlier, though net income and earnings per share declined. The stock has seen a very large rebound after a tough year, and the raised guidance underscores management's confidence in monetizing AI-powered products.
Doximity, Cloudflare, and Atlassian surge premarket on strong earnings
Doximity, Cloudflare, and Atlassian led premarket movers after reporting quarterly results that beat expectations. Doximity shares soared 66% after the professional medical networking platform reported fiscal first-quarter 2027 revenue of $156.6 million, above the $151.7 million consensus, and raised its full-year financial targets. Atlassian surged 31% after delivering a fiscal fourth-quarter earnings beat with adjusted EPS of $1.87 versus the $1.50 consensus and revenue of $1.77 billion, representing 28% year-over-year growth. Cloudflare rose 16.2% to $330.51 after raising its full-year 2026 revenue forecast to between $2.86 billion and $2.87 billion, citing resilient demand linked to artificial intelligence. Other notable gainers included PubMatic, Figs, Twilio, Airbnb, Hertz, QuinStreet, and JFrog, all of which advanced on better-than-expected results. On the downside, The Trade Desk tumbled more than 27% after its second-quarter revenue of $715.1 million missed estimates and it guided for a third-quarter revenue decline of about 12%, while Sezzle plunged 23% on a warning that revenue growth could slow to around 30% in the second half of 2026.
Doximity Faces AI Investment Squeeze Amid Weak Pharma Ad Market
Doximity is accelerating artificial intelligence investments to expand beyond its core physician engagement platform, even as a sluggish pharmaceutical advertising market and rising costs pressure near-term financial performance. The company has signed its first AI Search contracts with top-20 pharmaceutical companies and believes AI Search alone represents a multibillion-dollar incremental addressable market, while nearly half of all active prescribers now use its AI tools. However, management expects the overall healthcare professional digital advertising market to grow only around 5% or less during fiscal 2027, and adjusted EBITDA margins are projected to decline from 55% in fiscal 2026 to approximately 49% in fiscal 2027 due to increased spending on AI compute, engineering talent, and marketing. The Zacks Consensus Estimate for fiscal 2027 revenues is pegged at $670.2 million, implying growth of 3.9%, while adjusted EPS is pinned at $1.39, indicating a decline of 8.6%. Shares of the Zacks Rank #3 company have lost 49.8% so far this year, compared with the industry's 5.6% decline and the S&P 500's 10.9% rise.
Seeking Alpha Quant rates Centene top healthcare stock, Doximity bottom ahead of Q2 earnings
Seeking Alpha's quantitative framework has identified Centene Corporation as the highest-rated healthcare stock with a Strong Buy rating of 4.97, while Doximity received the lowest rating of 1.21, a Strong Sell, as the second-quarter earnings season begins. The Health Care Select Sector SPDR Fund ETF, which tracks the sector and represents roughly 12.12% of the S&P 500, has risen 4.52% year-to-date, trailing the benchmark index's 10.06% advance. In the second quarter, the broader healthcare sector posted a modest 8.78% return, while the Technology index skyrocketed 43.49%. The top five Strong Buy stocks with market caps above $2 billion also include Liquidia Corporation at 4.95, BrightSpring Health Services at 4.95, LifeStance Health Group at 4.93, and PACS Group at 4.92. The bottom five Strong Sell or Sell stocks include TransMedics Group at 1.26, CSL Limited at 1.30, Zoetis at 1.34, and EssilorLuxottica ADR at 1.39.
Wall Street’s Favorite Stocks: Doximity, Crane NXT, and Charles Schwab
Wall Street analysts have set price targets implying returns above 20% for Doximity, Crane NXT, and Charles Schwab. Doximity, a digital platform for physicians, has a consensus target of $25.42, suggesting a 24.2% upside from its $20.47 share price, supported by 25.5% annual sales growth and an 89.1% gross margin. Crane NXT, a payment and authentication technology provider, carries a $66.83 target for a 36% implied return, backed by 15.3% average backlog growth and projected 16.3% revenue acceleration. Charles Schwab, the wealth management and brokerage firm, has a $115.85 target implying 28.2% upside, driven by 15.9% annual revenue growth and a 14.9% return on equity.
Comcast surges 13% premarket on NBCUniversal, Sky spin-off plan
Comcast shares surged 13% in premarket trading after the company announced plans to spin off NBCUniversal and Sky into a separate publicly traded company in a tax-free transaction expected to close within a year. Viridian Therapeutics climbed 10.2% following FDA approval of Lumvoa for thyroid eye disease, its first commercial product. Doximity fell 5.1% amid continued pressure from analyst price target cuts after weak fiscal 2027 revenue guidance. Verizon Communications gained 1% after agreeing with BT Group to combine international enterprise operations into a 50:50 joint venture serving over 3,000 multinational customers. SpaceX rose more than 1% on news it will join the Nasdaq-100 Index on July 7.
CMCSA · Capital · Positive Announced tax-free spin-off of NBCUniversal and Sky into a separate publicly traded company.
DOCS · Capital · Negative Fell 5.1% amid analyst price target cuts after weak fiscal 2027 revenue guidance.
VRDN · Regulation · Positive FDA approval of Lumvoa for thyroid eye disease, its first commercial product.
BT-A.LSE · Demand · Positive Agreed with Verizon to combine international enterprise operations into a 50:50 JV serving over 3,000 multinational customers.
VZ · Demand · Positive Agreed with BT Group to combine international enterprise operations into a 50:50 JV serving over 3,000 multinational customers.
Vertical Software Stocks Mixed in Q1 as Upstart Leads Revenue Growth and Adobe Tops Guidance
Vertical software stocks delivered a mixed first quarter, with the group beating revenue estimates by 2.2% but issuing next-quarter guidance 0.6% below expectations, and shares falling 8.8% on average since reporting. Upstart posted the fastest revenue growth, up 44.4% year on year to $308.2 million, though it missed EBITDA estimates and offered slightly lower full-year revenue guidance. Adobe achieved the highest guidance raise among peers, reporting revenue of $6.62 billion, up 12.7%, and beating billings estimates, yet its stock fell 10.8%. Doximity recorded the slowest revenue growth at 5.1% to $145.4 million and the weakest full-year guidance update, sending shares down 12.2%. Autodesk beat expectations with revenue of $1.93 billion, up 18.4%, but its stock dropped 19.6%, while Agilysys topped estimates with $82.95 million in revenue, up 11.7%, and its shares surged 22.7%.
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