The Appen Ltd (ASX: APX) share price is heading in the right direction at last.
On Friday afternoon, the artificial intelligence data services companyâs shares are up 5% to $2.55.
However, that doesnât hide the fact that the struggling tech companyâs shares are down 77% year to date prior to today.
Why is the Appen share price rebounding?
Investors have been buying Appenâs shares today following a huge rebound in the tech sector which has seen the S&P/ASX All Technology Index rise an impressive 5.7%.
This has been driven by an incredible night of trade on Wall Street after the latest US inflation data came in softer than expected. This has sparked hopes that inflation has peaked and interest rates wonât need to rise as much as first feared.
Should you invest?
While today’s gain is positive, nothing has changed fundamentally for Appen from this news. So, the same drivers that sent the Appen share price crashing to a multi-year low on Thursday are still in play.
The broker community is overwhelmingly bearish on Appen, with Morgan Stanley predicting further weakness from its shares in the future. At the end of last month, it initiated coverage on Appen with an underweight rating and $2.25 price target.
The broker has fears over rising competition in the industry from the likes of Amazon and Sagemaker. It feels their technology is more sophisticated and sees no competitive advantage in Appen’s platform.
The post Why is the Appen share price storming higher today? appeared first on The Motley Fool Australia.
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More reading
- Could this imply light at the end of the tunnel for Appen shares?
- Appen share price sinks to another multi-year low despite new recruits
- Leading fund manager names the 3 ASX stocks that drove its returns higher in October
- Why are ASX 200 tech shares getting bashed around today?
- Why is the Appen share price smashing the ASX 300 today?
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 Ltd. 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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