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Background: Academic stress is a prevalent concern among physiotherapy students due to the demanding nature of professional training. Persistent stress may adversely affect students’ academic outcomes as well as cognitive functions that are essential for learning, decision-making, and clinical reasoning. This study aimed to examine how academic stress is associated with academic performance and cognitive function among physiotherapy students. Methods: A cross-sectional study was conducted among 100 undergraduate physiotherapy students aged 18–25 years. Academic stress was assessed using the Perceived Stress Scale (PSS-10), academic performance was measured using the Academic Performance Scale (APS), and cognitive functions were evaluated using the Cognition Self-Assessment Rating Scale (C-SARS). Descriptive statistics were used to summarize the data, and Pearson’s correlation coefficient was applied to analyze the relationships between variables. Statistical significance was set at p < 0.01. Results: Most participants reported moderate levels of academic stress (65%), while 19% experienced high stress and 16% reported low stress. A significant moderate negative correlation was found between academic stress and academic performance (r = −0.499, p < 0.01), indicating that increased stress was associated with reduced academic performance. Additionally, academic stress showed a significant moderate positive correlation with cognitive difficulties (r = 0.416, p < 0.01), suggesting that higher stress levels were linked to impairments in attention, memory, and executive functioning. Conclusion: Academic stress significantly influences both academic performance and cognitive functions among physiotherapy students. Early identification of stress and implementation of effective stress-management strategies may help improve academic outcomes and cognitive wellbeing in this population.