What happened

Appian (APPN 3.16%) was among the big winners last month as shares of the cloud-based low-code specialist gained first on a strong third-quarter earnings report and then on what appeared to be an epic short squeeze. According to data from S&P Global Market Intelligence, Appian shares were up a whopping 121% at the end of November.

As you can see from the chart below, the cloud stock rallied throughout the month and had actually tripled before it fell sharply on the last day of the month.

APPN Chart

APPN data by YCharts

So what

A strong third-quarter earnings report sparked the rally. Cloud subscription revenue -- the company's key metric -- rose 40% in the quarter to $34.3 million, ahead of the company's own guidance. Overall revenue rose 17% to $77.3 million, which easily beat expectations of $70.9 million. On the bottom line, the company turned adjusted earnings per share of breakeven, well ahead of the consensus at a loss of $0.17.

Appian CEO Matt Calkins speaks at a conference.

Image source: Appian.

The pandemic appears to be driving momentum toward low-code technology that allows apps to be deployed with little or no code. This could, in turn, be sparking long-term growth for Appian. Shares rallied 20% on that news, and gained the following week on a pair of upgrades from Goldman Sachs and Needham.

From there, the stock continued to rise on little news in what looked like a short squeeze, as a third of the float had been sold short as of Nov. 13. Those bearish investors seemed to rush in to buy back shares, lifting the stock further. It culminated in a feverish rally all the way to $216.41 in intraday trading on Nov. 27, representing a 241% month-to-date gain in the stock. Shares fell sharply from there, diving on the last day of the month as the rally broke.

Now what

Appian shares continued their wild ride on the first day of December with the stock falling as much as 10% before recovering most of those losses to close down just 2%. Traders may spy an opportunity in the volatility, meaning the stock could see another rocky month. Still, long-term investors should remain focused on the promising evolution of low code. For the fourth quarter, management guided to cloud subscription revenue growth of 33%-35%, indicating solid momentum.