The Appen Ltd (ASX: APX) share price skyrocketed by 41% on Tuesday before the ASX announced a pause in trading pending an announcement just before 1pm.
Appen shares reached an intraday peak of $1.17, then fell back to $1.08 before the pause took effect.
That intraday peak was a big jump on yesterday's closing Appen share price of 83 cents.
It's also the first time the stock has traded above $1 since October last year.
There has been no official news from Appen to explain the share price surge earlier today.
However, ASX tech shares are currently the second-best performers among the 11 market sectors, so perhaps Appen is riding a bit of sector optimism today.
The S&P/ASX 200 Information Technology Index (ASX: XIJ) is up 0.6%.
The pause in trading was announced by the ASX compliance department. This hints at the possibility that the announcement to follow will be a 'please explain' from the ASX to Appen.
While we're waiting for that ASX announcement, let's review the latest news from Appen.
Latest news: FY23 results
Appen released its FY23 full-year financial results and an investor presentation on 27 February.
Investors were pretty pleased with the numbers, with the Appen share price rising 16.7% on the day.
As my colleague Bernd reported, Appen revealed a near-30% year-over-year decline in revenue driven by a lower contribution from global services.
New markets revenue fell 7.8% due to a 46.5% decline in Appen's global product. And there was a $69.2 million non-cash impairment charge.
The good news is that Appen resized its cost base and worked out how to save $60 million in annualised costs from here.
The company also expects to cut costs by a further $13.5 million this year. However, these cuts are only the result of Alphabet Inc terminating its global inbound services contract.
That deal was worth $82.8 million in revenue for Appen in 2023, so it was a big blow to lose the Google parent as a customer.
The contract termination was announced in January and becomes effective next week.
Following Appen's FY23 results, the consensus recommendation on Appen shares fell from a hold to a moderate sell on CommSec.
What's next for the Appen share price?
Volatility is typically the name of the game with small caps.
The battered company is also in transformation mode, so we'll just need to see how that goes.
It's possible that the rise of artificial intelligence may become a catalyst for taking the Appen share price higher in the coming years.
Appen is hoping to return to cash EBITDA profitability in FY24.
However, it says this "will largely depend on revenue growth from our non-global customers, the timing of which remains uncertain".
The company says it is now working with 22 large language model builders globally to support the development of generative AI foundation models.
According to the latest S&P DJI quarterly rebalance, Appen will drop out of the ASX 300 on 18 March.
