Shares of Freshworks Inc. (NASDAQ: FRSH) experienced a sharp decline in Thursday trading after the company released its first-quarter report. Trading closed with a 19.6% drop in shares, according to S&P Global Market Intelligence data. Although the financial results for the first quarter exceeded Wall Street analysts’ expectations for revenue and earnings, an uninspiring future outlook and analyst downgrades prompted investors to actively sell off shares.

Following the report, Oppenheimer analyst Brian Schwartz downgraded the stock from “outperform” to “perform,” removing the previous price target of $26 per share and not setting a new one. Schwartz emphasized that artificial intelligence could pose a serious challenge for Freshworks. Weak sales forecasts and concerns about AI’s impact on the business led to a significant decrease in the company’s share value that day.