What happened
Shares of Stitch Fix (SFIX 1.62%) jumped today, even though there was no news out on the online styling service. Instead, the stock seemed to go higher because it's seen as a potential AI play due to the data science and algorithms it uses to select clothes for its customers. It was one of several AI stocks gaining today.
As of 12:18 p.m. ET, the stock was up 16.1%.
NASDAQ: SFIX
Key Data Points
So what
AI stocks have surged in recent days as investors speculate that technology like OpenAI's ChatGPT could be revolutionary for companies that are best suited to take advantage of it.
Shares of BuzzFeed, for example, more than doubled in a single session after it said it would use ChatGPT for some content on its site, and today C3.ai's shares rose by more than 25% after it announced a new generative AI product suite.
The difference with Stitch Fix is that it hasn't made any kind of product announcement around AI. However, it's easy enough to imagine how it could integrate a chat-based feature like ChatGPT to improve its search results, both internally and externally, and increase its success rate for its styling service.
C3.ai's new Generative AI Enterprise Search, which will enable businesses to better search and find data internally, sounds like the kind of tool that would benefit Stitch Fix as well.
Now what
Stitch Fix has long touted itself as a data science-based company and sees that as distinguishing itself from other apparel retailers, but it's unclear if it will be able to seize on the opportunity in AI.
The company is going through a transition, with founder Katrina Lake back in the CEO chair on an interim basis. The stock has also plummeted since its peak two years ago, as its revenue and client base have shrunk and profits have disappeared.
Given that, there's a lot of upside potential if Lake can find a way to turn the business around, but today's movement looks like pure speculation, as there is no indication the company is doing anything new with AI.
