Appen share price soars again, up 29% since Monday

The dawning of a new age of artificial intelligence appears to have put a rocket under Appen shares this week…

| More on:
A man holding a cup of coffee puts his thumb up and smiles while at laptop.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Appen Ltd (ASX: APX) share price is racing higher again on Friday.

At the time of writing, the artificial intelligence (AI) data services company's shares are up 13.5% to $3.35.

This means the Appen share price is now up 29% since Monday's close.

Why is the Appen share price on fire this week?

With no news out of Appen or broker notes relating to the company, it is difficult to say for sure why its shares are on fire this week.

However, it is worth noting that the emergence of OpenAI's ChatGPT last year has been a game changer for the AI industry.

While companies have been spending billions on AI activities for years, the arrival of ChatGPT has been leaps and bounds ahead of anything that has been developed before. All in all, it appears that AI is now at an inflection point.

This has led to companies such as Google parent Alphabet and China's search engine giant Baidu scrambling into action to compete with OpenAI.

This could prove to be very good news for Appen, which has been struggling over the last few years and seen its share price head lower and lower.

How Appen could benefit

Appen provides tech companies with AI data services. It ensures that they have high quality data that companies can then use to train their machine learning models. Without high quality data, it is unlikely that their models would be able to come close to ChatGPT.

So, with Google and Baidu now believed to be upping their investments on AI activities materially, investors appear to believe that Appen could be well-positioned to benefit from increased demand for data services.

Though, it is worth remembering that this is not guaranteed. There's plenty of competition out there and some companies have taken such activities in-house.

The good news is that investors won't have to wait long until they get an update from Appen. It is scheduled to release its full year results later this month.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Appen. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Technology Shares

A man sits thoughtfully on the couch with a laptop on his lap.
Technology Shares

This ASX tech stock rocketed 60% in March! Can it keep on delivering?

After soaring in March, the ASX tech stock is now up 169% since this time last year.

Read more »

Five happy friends on their phones.
Share Market News

Goldman Sachs says these ASX tech stocks can rise 18% to 30%

The broker sees big returns on offer from these shares.

Read more »

A guy helps a girl lift a couch, both are laughing.
Technology Shares

3 of the best ASX tech shares to buy and hold until 2030

I think these stocks have exciting futures.

Read more »

A young woman uses a laptop and calculator while working from home.
Technology Shares

If I'd put $5,000 in Block shares 5 months ago, here's what I'd have now

Was it a good idea to invest in this payments stock five months ago?

Read more »

Close up of a sad young woman reading about declining share price on her phone.
Technology Shares

Why is the Brainchip share price sinking over 7% today?

What's going on with this tech stock on Wednesday?

Read more »

woman working on tablet
Technology Shares

Missed out on Nvidia? My best ASX tech stock to buy and hold

Do you have FOMO after the US chip maker's share price rocketed? Here's an Aussie company worth backing instead.

Read more »

Three businesspeople leap high with the CBD in the background.
Technology Shares

Guess which ASX small-cap stock is rocketing 45% on 'pivotal moment'

Investors have responded very positively to an announcement.

Read more »

A man looking at his laptop and thinking.
Technology Shares

Why are these ASX tech shares getting smashed today?

Owners of these two stocks are missing out today.

Read more »