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Why Stock Skyrocketed Today

By Evan Niu, CFA - Jun 1, 2021 at 3:14PM

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The AI specialist scored a multiyear renewal from a prominent customer.

What happened

Shares of (AI 1.81%) have skyrocketed today, up by 16% as of 2:30 p.m. EDT, after the company announced that Shell has renewed a strategic agreement for another five years. The companies will accelerate the deployment of enterprise artificial intelligence (AI) and machine learning (ML) applications within Shell's operations.

So what and Shell had initially formed a partnership back in 2018, with Shell selecting's platform to improve its operating performance by using a suite of AI applications. The renewal represents an expansion of the existing relationship, with an emphasis on reliability, asset integrity, and process optimization. The news comes as part of's Open AI Energy Initiative, an open AI ecosystem announced earlier this year that is catered to the energy industry.

Person refueling a car at a gas station pump.

Image source: Getty Images.

"Together with Shell, we are committed to driving cleaner energy and climate initiatives globally through the power of tried, tested, and scalable enterprise AI-based solutions," CEO Thomas Siebel said in a statement. "Our collaboration will shape the global market for AI/ML applications in the energy and resource industries."

Now what

Financial details around the renewal were not disclosed, but Shell is one of's most prominent customers. has previously noted that it faces customer concentration risk, with two separate clients representing 16% and 12% of revenue last fiscal quarter. Based on previous disclosures in the prospectus, Shell does not appear to account for more than 10% revenue. is scheduled to report fiscal fourth-quarter results tomorrow after the close.

Evan Niu, CFA has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends, Inc. The Motley Fool has a disclosure policy.

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