Why is the Appen share price soaring 18% on Monday?

One broker has upped its expectations for the AI-focused tech share by 44%.

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Key points

  • The Appen share price is taking off today, rising 17.55% to trade at $2.88 at the time of writing
  • It comes amid reports a broker has lifted its price target for the stock by 44%
  • Not to mention, the company hosted its AGM on Friday

The Appen Ltd (ASX: APX) share price is experiencing a ripper start to the week.

The stock is soaring 17.55% right now to trade at $2.88. That's despite no word having been released from the artificial intelligence (AI)-focused tech company.

Though, there are a few happenings that may be influencing the stock today. Let's take a look at what might be going right for the Appen share price.

What's going right for the Appen share price?

As the above chart shows, the Appen share price has countered some of its long-term losses over the last week. The stock is currently 23% higher than it was last Monday – and one broker's expectations for its future have increased.

Wilsons has lifted its forecast for the S&P/ASX 300 Index (ASX: XKO) tech share, giving it a market weight rating and tipping it to reach $2.54, The Australian reports.

That's 44% higher than the broker's previous forecasts and represents a potential 4% upside on the stock's previous close price. Though, it's also around 12% lower than the share is swapping hands for right now.

The forecast upgrade comes amid increasing interest in AI technology. Appen provides data and services for machine learning and AI applications. Thus, plenty of eyes have been on the company as the popularity of the likes of ChatGPT has rocketed in recent months.

It's also worth mentioning that Appen hosted its annual general meeting (AGM) on Friday. Thus, today's surge might be partly a delayed reaction to its latest release, wherein chair Richard Freudenstein commented:

Our 2022 financial results were far from satisfactory and reflect the broader tech slowdown that we are seeing in the US.

At the same time, 2022 was a breakthrough year for AI with the emergence of generative AI. The evolution of large language models such as ChatGPT have created significant excitement around the future of AI.

Still, there are a significant number of market participants that appear to remain bearish on the Appen share price.

The ASX 300 stock is among the most shorted on the ASX, with a short interest of 8.2%, my Fool colleague James reports. That's down from its peak of 10.5% earlier this month.

No doubt, many short sellers will be feeling the burn from the Appen share price's 18% gain today.

Motley Fool contributor Brooke Cooper 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.

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