What Happened?
Shares of online learning platform Udemy (NASDAQ: UDMY) jumped 3.2% in the afternoon session after Canaccord Genuity reiterated its Buy rating and $12.00 price target, citing optimism about the company's artificial intelligence (AI) strategy. The investment firm expressed confidence in Udemy's ongoing transformation from a simple online content catalog to an AI-enabled reskilling platform for enterprise clients. Following a discussion with Udemy's CEO, Canaccord noted that the company's revamped go-to-market strategy and new products should help capture the growing corporate demand for AI training. This strategic shift is expected to potentially lead to accelerated revenue growth for the company heading into 2026. Canaccord's $12.00 price target implies a potential 77% upside from the stock's recent price of $6.79, signaling strong conviction in the company's future.
After the initial pop the shares cooled down to $7.02, up 3.3% from previous close.
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What Is The Market Telling Us
Udemy’s shares are very volatile and have had 20 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 4 days ago when the stock dropped 3.1% on the news that markets pulled back as hotter-than-expected wholesale inflation data was released, raising concerns about the future path of interest rates. The U.S. Labor Department reported that the Producer Price Index (PPI), which measures inflation at the wholesale level, jumped 3.3% year-over-year in July, significantly above economists' forecasts of 2.5%. This unexpected increase suggests that cost pressures are building for businesses, which could eventually be passed on to consumers. The hotter-than-expected data prompted investors to scale back bets on an imminent interest rate cut by the Federal Reserve. Higher interest rates can dampen economic activity and negatively affect the valuations of growth-oriented stocks, such as those in the internet sector, leading to a broad market retreat.
Udemy is down 14.8% since the beginning of the year, and at $7.02 per share, it is trading 30.5% below its 52-week high of $10.10 from February 2025. Investors who bought $1,000 worth of Udemy’s shares at the IPO in October 2021 would now be looking at an investment worth $255.24.
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