What Happened?
Shares of low code software development platform provider Appian (Nasdaq: APPN) jumped 7.8% in the afternoon session as the debate around the future of AI continues following the unveiling of DeepSeek. The market is recalibrating and rotating to stocks that are not only more insulated if DeepSeek prevails in the AI arms race but to stocks that may actually benefit no matter who wins that race. The proliferation of AI will be a general tailwind to demand for cybersecurity, big data, and automation software.
For example, AI can make bad actors better and make the search for vulnerabilities faster. This means that enterprises will need more of what CrowdStrike, Zscaler or Cloudflare offer. Additionally, more data is only valuable if the mountains of numbers, text, and videos can lead to actionable insights. AI can do exactly that, meaning that enterprises will get more value from platforms like Snowflake and MongoDB. Similarly, AI can make automation software more valuable by making it more adaptive, which means that customers can extract more value from platforms like ServiceNow and Appian.
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What The Market Is Telling Us
Appian’s shares are quite volatile and have had 17 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 biggest move we wrote about over the last year was 9 months ago when the stock dropped 23.1% on the news that the company reported weak first-quarter results with revenue guidance for the next quarter, missing analysts' expectations, while full-year revenue guidance was roughly in line. While revenue beat slightly, billings (often analyzed in addition to revenue because it's cash in the door rather than recognized revenue dictated by accounting rules) missed Wall Street's estimates. Overall, this was a weaker quarter for Appian.
Appian is up 11.4% since the beginning of the year, but at $36.97 per share, it is still trading 11% below its 52-week high of $41.56 from November 2024. Investors who bought $1,000 worth of Appian’s shares 5 years ago would now be looking at an investment worth $742.22.
Unless you’ve been living under a rock, it should be obvious by now that generative AI is going to have a huge impact on how large corporations do business. While Nvidia and AMD are trading close to all-time highs, we prefer a lesser-known (but still profitable) semiconductor stock benefiting from the rise of AI. Click here to access our free report on our favorite semiconductor growth story.
