What Happened?
Shares of online study and academic help platform Chegg (NYSE: CHGG) jumped 7.7% in the afternoon session after investor optimism picked up as the company focused on transforming its core academic product, Chegg Study, into an AI-powered Personalized Learning Assistant. The education technology company is in the process of revamping its main offering to function as a personalized learning coach, aiming to improve learning effectiveness for students. Further fueling positive sentiment, Chegg announced plans to launch two new core capabilities for the platform in September 2025. This strategic pivot towards artificial intelligence and the upcoming product enhancements appear to be resonating with investors, who are bidding up the shares in anticipation of future growth.
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What Is The Market Telling Us
Chegg’s shares are extremely volatile and have had 99 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 1 day ago when the stock dropped 7.2% on the news that the major indices continued to retreat (Nasdaq -1.5%, S&P 500 -1.2%) amid profit-taking and renewed concerns about tariffs. Investors reacted to a federal court ruling that most of President Trump's global tariffs were illegal, raising uncertainty over trade policy and the fiscal impact of potential refunds. Rising Treasury yields added to the pressure, with the 10-year climbing above 4.2% and the 30-year nearing 5%, intensifying worries about stretched equity valuations. September's historically weak track record for stocks further dampened sentiment, leaving traders cautious ahead of the jobs report later in the week and the Federal Reserve's upcoming rate decision.
Chegg is down 11.6% since the beginning of the year, and at $1.49 per share, it is trading 44% below its 52-week high of $2.65 from December 2024. Investors who bought $1,000 worth of Chegg’s shares 5 years ago would now be looking at an investment worth $21.24.
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