Artificial Intelligence Technology Solutions (OTCM: AITX) stock price started 2023 well after it plunged to an all-time low of $0.0054. The shares jumped to a year-to-date high of $0.012, which was ~126% above the lowest point in 2022. They were trading at $0.0088 on Monday.
AI stocks rise
AITX stock price has jumped for two main reasons in 2023. First, it has jumped because of the ongoing inflows in companies and cryptocurrencies with an AI component. Stocks like Microsoft and C3.ai have risen sharply after the successful rollout of ChatGPT.
Historically, investors and retail traders tend to follow the crowd. For example, we saw them invest in all companies in the EV space following the strong performance of Tesla. Similarly, the growth of SAAS saw investors allocate funds in companies like Slack, Adobe, Dropbox, and Box among others.
Further, in 2021, we saw all cryptocurrencies rally as the price of Bitcoin surged. In most periods, such thematic rallies end in tears, as we saw with the metaverse, dot com bubble, and EV stocks.
Therefore, since AITX full name starts with Artificial Intelligence, traders rushed to it despite its fundamentals.
Second, AITX stock price rose because of the strong forward guidance issued by the company. In a statement, the company said that its revenue jumped by 50% on a YoY basis in the third quarter. Revenue rose from $267k to $402k, helped by a single client. Its margin also expanded from 50% to 57%.
AITX expects its revenue for the fiscal year 2024 to bring about $800k of monthly recurring revenue by February 2024.
Still, AITX is investing in its growth, which led to a significant increase in losses. Operating expenses was $3.09 million. In a statement, its CEO, Steve Reinharz said:
“The technology that we’ve developed, that we’re building upon, and that we own, is transforming how legacy security is utilized, paid for, and how it delivers value to its users. I thank everyone for their hard work in bringing the Company to this point.”
AITX stock price forecast
AITX stock chart by TradingView
In this December report, I warned that the AITX share price would continue falling in 2022. This view has not worked out as the stock more than doubled. It doubled after forming a double-bottom pattern at ~0.0060. It moved above the 25-day and 50-day moving averages. The shares are now at the important level on May 12 last year.
Therefore, the outlook of the AITX stock price is still bearish, with the next key support level to watch being at $0.0076. A drop below that support level will bring the possibility of it dropping to the key level at $0.007.
The post 2 reasons why the AITX stock price has surged in 2023 appeared first on Invezz.