The Appen Ltd (ASX: APX) share price has been well and truly out of form in 2021.
Since the start of the year, this tech company’s shares have fallen almost 57% to $11.10.
What’s happening?
Appen has been going through a difficult spot this year due to COVID-19 putting a dampener on demand for its services from some of its biggest customers. These have included many of the biggest tech companies in the world such as Google, Microsoft, and Facebook.
However, while the short term has been underwhelming, especially compared to the explosive growth we have all become accustomed to, its long term future remains very positive.
This is due to the company’s exposure to the artificial intelligence (AI) and machine learning markets as a leading developer of high-quality, human annotated datasets. These datasets are critical to the development process for AI models.
Is AI the real deal?
AI gets hyped up a lot, but there’s a very good reason for this. Many experts believe it will be the key driver of the global economy in the future.
One of those is the team at PWC, which called it a US$15.7 trillion game changer.
A recent report comments: “Artificial intelligence (AI) can transform the productivity and GDP potential of the global economy. Strategic investment in different types of AI technology is needed to make that happen […] Our research also shows that 45% of total economic gains by 2030 will come from product enhancements, stimulating consumer demand. This is because AI will drive greater product variety, with increased personalisation, attractiveness and affordability over time.”
Is the Appen share price in the buy zone?
One leading broker that sees a lot of value in the Appen share price at the current level is Citi.
According to a recent note, its analysts have retained their buy rating and $17.10 price target on its shares.
Based on the current Appen share price, this implies potential upside of 53% for its shares over the next 12 months.
This could make its shares dirt cheap if Citi is on the money with this one. Time will tell.
