Why is the Appen share price leaping 18% without a word today
The Appen Ltd (ASX: APX) share price is off to the races today. Shares in the All Ordinaries Index (ASX: XAO) AI stock closed yesterday trading for $1.29. In afternoon trade on Thursday, shares are swapping hands for $1.52 apiece, up 18.3%. This massive outperformance comes despite no fresh news out from the company today. And it now sees Appen stock up a whopping 145% in 2024.
ASX tech shares are leading the charge higher, with the S&P/ASX All Technology Index (ASX: XTX) up 1.7% at the time of writing. With no news out from the ASX tech stock today, investors appear to be bidding up the Appen share price amid renewed enthusiasm around generative AI.
Appen's Success in Generative AI
Commenting on the generative AI opportunities that could boost the Appen share price back in August, CEO Ryan Kolln said, "Appen's success in generative AI is resulting in a positive revenue trajectory." He added that over the first half of 2024: We saw strong growth in China and Global Product driven by generative AI projects, with China achieving consecutive revenue records across the quarters… Generative AI development depends on vast amounts of high-quality data.
Appen reported its half-year results for the six months ended 30 June (H1 FY 2024) on 30 August. Key financial metrics included an 18.4% year on year decline in revenue to $113.4 million. While the company still booked an underlying net loss after tax of $11.8 million, this marked a $22.4 million improvement from the net loss reported in H1 FY 2023.
Almost all of the revenue decline was due to the termination of Appen's Alphabet Inc Class A (NASDAQ: GOOGL) contract. Appen's Global Services revenue took a particularly hard hit from the termination of the Google account, down 36.5% year over year to $63.6 million. The Appen share price crashed 17.7% on the day of that release. Ground it's more than made up for since.
Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet, Appen, Apple, Microsoft, and Nvidia. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has recommended the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool Australia has recommended Alphabet, Apple, Microsoft, and Nvidia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
