Appen Ltd (ASX: APX) shares have crashed around 8% in Friday afternoon trade, extending the ASX AI stock's 4% share price decline yesterday.
At the time of writing, the shares are changing hands at 83 cents a piece.
The latest decline means the shares are now down around 4% for the year-to-date and are 34% lower than this time last year.
Image source: Getty Images
What is going on with the ASX AI stock today?
There hasn't been any price-sensitive news out of the artificial intelligence (AI) data company this week to explain the share price crash.
The decline is most likely the result of investors taking their gains off the table after a small rally earlier this week, and perhaps a dip in investor confidence.
Appen is scheduled to announce its first-half 2026 earnings update in late August so it could also be that investors are getting nervous about the update.
The AI company has suffered a rough start to 2026. The share price flew 71% higher to an annual high of $1.90 each in late-January after it posted a strong quarterly update.
But sentiment shifted quickly in late-April when Appen posted its next quarterly update. The company posted a 9% increase in revenue to $54.8 million, but the results showed it is still barely profitable at an EBITDA level. In addition, the performance of its Appen Global business spooked investors. It reported a 37% decline in revenue to $19.9 million. The share price sank 30% as a result.
With investor confidence lost, the company has struggled to recoup those losses, with the share price tumbling further to the time of writing.
Management confirmed Appen's FY26 revenue guidance in late May, which created a short-lived spike in confidence. But then the sell-off resumed. Guidance is in the range of $270 million to $300 million. That compares to FY25 revenue of $231 million.
Now investors are looking for evidence that the company's turnaround is continuing and that demand for AI training data is translating into stronger financial performance.
Are Appen shares a buy, sell or hold?
Analysts are mostly bullish about where Appen shares could travel over the next 12 months.
TradingView data shows two (out of three) analysts have a buy or strong buy rating on the ASX AI stock. The remaining expert has a hold rating.
They all agree there will be some element of upside ahead though. The average $2.26 target price implies a potential 173% upside at the time of writing. Even the minimum $1.96 target price suggests the shares will climb at least another 137%.
