What Happened?
Shares of business intelligence platform Domo (NASDAQ: DOMO) jumped 8.4% in the morning session after the company announced it signed a strategic collaboration agreement with Amazon Web Services (AWS) to accelerate the adoption of generative artificial intelligence solutions.
The partnership is designed to help mutual customers of both companies build AI-powered solutions by leveraging Domo's AI platform and AWS's cloud infrastructure. The collaboration specifically centers on Domo AI, the company's suite of AI tools that includes features like natural language querying and automated insights. This positive development follows other recent good news for the company. Just a day prior, analysts at TD Cowen upgraded Domo's stock rating to Buy from Hold and significantly raised their price target, citing a belief that the company is "turning the corner" on key strategic initiatives that could drive sustained growth.
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What Is The Market Telling Us
Domo’s shares are very volatile and have had 28 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 gained 16.3% on the news that analysts at TD Cowen upgraded the stock to Buy from Hold and raised their price target to $21.00 from $13.00. The upgrade is based on the belief that Domo is "turning the corner" on two key strategic initiatives that could fuel sustained growth. According to the analyst firm, these initiatives include a shift to consumption-based pricing and the establishment of partnerships with cloud data warehouses (CDWs). TD Cowen noted that these strategic moves are expected to drive sustainable growth acceleration for the company. The new price target of $21 represents a significant increase and suggests potential upside from the stock's recent trading levels.
Domo is up 142% since the beginning of the year, and at $17.15 per share, has set a new 52-week high. Investors who bought $1,000 worth of Domo’s shares 5 years ago would now be looking at an investment worth $448.16.
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