Appen share price soars again, up 29% since Monday

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.

The post Appen share price soars again, up 29% since Monday appeared first on The Motley Fool Australia.

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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.

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