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Why the Appen Ltd share price has rocketed 20% higher today

The Appen Ltd (ASX: APX) share price has been one of the biggest movers on the local share market this morning.

At the time of writing the data solutions and services provider’s shares are up a massive 20% to $3.10.

What happened?

After the market closed yesterday the company released a positive announcement which revealed an upgrade to its full-year earnings guidance.

The increasing demand for its high quality data for machine learning-based product development has led management to expect full-year earnings before interest, tax, depreciation, and amortisation (EBITDA) growth of between 40% and 50% on last year’s result.

Previous guidance given in its full-year result in February was for mid to high teen EBITDA growth in FY 2017.

Should you invest?

As I said yesterday, I think Appen is a great buy and hold investment option in the information technology sector.

With natural language processing, machine learning, and artificial intelligence increasingly being used to automate business processes and personal tasks, I believe demand for Appen’s services is likely to remain strong for the foreseeable future.

So with its shares changing hands at around 29x trailing earnings, I think Appen is great value for money given its current growth profile.

As a result, I would put it up there with Nextdc Ltd (ASX: NXT) and WiseTech Global Ltd (ASX: WTC) as one of the best shares to own in the tech sector.

Where to invest $1,000 right now

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Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

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Motley Fool contributor James Mickleboro has no position in any stocks mentioned. The Motley Fool Australia owns shares of Appen Ltd and WiseTech Global. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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