Goldman Sachs Upgrades Toast Inc. to Buy With $36 Price Target as AI Features and Market Expansion Fuel Optimism

Goldman Sachs Turns Bullish on Toast as Restaurant Tech Gains Momentum

Goldman Sachs has upgraded Toast Inc. (TOST) from 'Neutral' to 'Buy,' raising its 12-month price target to $36 from a prior $30 — a move that signals growing confidence in the restaurant payments platform following a period of notable underperformance. The revised target represents roughly 25% upside from the stock's most recent closing price.

The upgrade comes after Toast shares have quietly climbed more than 15% over the past month, even as the stock remains down significantly on a longer time horizon — off nearly 35% over the past year.

What's Driving Goldman's Confidence

Analyst Will Nance at Goldman Sachs outlined several catalysts underpinning the upgraded outlook. Central to the thesis is Toast's product lineup, which Nance described as "best-in-class," combined with the recent rollout of Toast IQ Grow — an AI-powered marketing service the firm believes could meaningfully accelerate software-as-a-service average revenue per user metrics.

"TOST is well positioned to outperform from here as a result of its best-in-class product offering and the recent launch of AI-enabled marketing services ('Toast IQ Grow'), which we believe could be a potential accelerant to (software-as-a-service average revenue per user)," the firm noted.

Beyond the product layer, Goldman points to market share expansion as another growth lever. The firm expressed particular enthusiasm about Toast's momentum in retail, calling out international markets and enterprise customers as additional areas where the company appears to be gaining traction.

Fundamentals Holding Up Despite Stock's Struggles

One of the more striking elements of Goldman's note is the disconnect it identifies between Toast's stock performance and its underlying business fundamentals. Despite the stock's rough run in the first half of the year, Nance characterized the company's operational picture as resilient.

Consumer spending trends — both including and excluding fuel-related purchases — showed strength and gained momentum throughout the most recent quarter, according to the analyst. Goldman views this spending backdrop as a supportive tailwind for Toast's revenue outlook over the medium term.

The bank also framed the stock's prior underperformance as an opportunity, suggesting shares are attractively valued relative to the strength of the underlying business.

Wall Street Broadly Aligned With the Upgrade

Goldman's bullish pivot appears consistent with the broader analyst community's stance on Toast. According to Koyfin data, 21 out of 30 analysts covering the stock currently rate it 'Buy' or higher, with the remaining analysts carrying 'Hold' ratings. Notably, no analysts currently hold a negative rating on the stock.

The 12-month consensus price target across Wall Street sits at $34.27, implying approximately 19% upside from recent levels — slightly below Goldman's more aggressive $36 target but directionally aligned.

Retail Investors Take Notice

On social trading platform Stocktwits, retail sentiment around TOST shifted modestly from 'bearish' to 'neutral' in the 24 hours following the upgrade news, while message volume surged approximately 700% — a signal that the Goldman call captured significant attention among individual investors.

One platform user acknowledged the positive development while urging caution: "Bullish call, but the stock still needs follow-through to prove the setup."

What Investors Should Watch

Several factors are worth monitoring as this story develops. Toast's ability to monetize its Toast IQ Grow AI offering will likely be a key data point in upcoming earnings reports. Similarly, the pace of its international expansion and penetration into retail and enterprise segments could validate or challenge Goldman's growth narrative.

With the stock still well below its one-year highs despite the recent 15% bounce, how Toast executes over the coming quarters will ultimately determine whether the Wall Street upgrade translates into sustained price recovery.