The stock market suffered a significant drop on Thursday. Investors were concerned that strong employment figures could mean a longer period of high interest rates. The Dow Jones Industrial Average (^DJI +0.02%) led markets lower with a decline of more than 1%, but the drops in the Nasdaq Composite (^IXIC +1.71%) and S&P 500 (^GSPC +0.84%) were almost as bad.
|
Index |
Daily Percentage Change |
Daily Point Change |
|---|---|---|
|
Dow |
(1.07%) |
(366) |
|
S&P 500 |
(0.79%) |
(35) |
|
Nasdaq |
(0.82%) |
(113) |
Data source: Yahoo! Finance.
AI stocks have captured the attention of the investing community, and they've often been able to move higher even when the broader market comes under pressure. That was the case on Thursday as a couple of stocks that are trying to link themselves more closely to artificial intelligence posted big gains. Below, you'll learn more about why DigitalOcean Holdings (DOCN +9.44%) and Genius Sports (GENI 7.95%) were on the rise.
DigitalOcean makes a big AI buy
Shares of DigitalOcean Holdings closed higher by 13% on Thursday. The cloud-solutions provider announced an $11 million acquisition that it thinks will give its efforts to develop AI applications a nice boost.
DigitalOcean said that it had come to an agreement to acquire cloud infrastructure-as-a-service provider Paperspace. Paperspace specializes in highly scalable applications that take advantage of the full capabilities of graphics processing units (GPUs), which offer more computing power than many other semiconductor chip products and therefore have been central to the early development of AI and machine learning applications.
NYSE: DOCN
Key Data Points
With the acquisition, DigitalOcean believes that it will be able to help its clients test, develop, and deploy solutions using artificial intelligence more efficiently. In addition, for those customers who have already used DigitalOcean's platform to assist in their AI efforts, the company believes that the Paperspace acquisition will augment and enhance the quality of those applications.
A 13% gain on a stock with a $4 billion market cap works out to about $520 million in value. Given the market's reaction to the news, perhaps Paperspace should have held out for more than $11 million on the purchase price. It'll be interesting to see whether DigitalOcean is able to generate results that justify the hype on its most recent purchase.
Genius scores a touchdown
Shares of Genius Sports did even better, climbing 26% on the day. The sports-betting technology provider cemented an extension on a key partnership that should help it accelerate its business efforts.
Genius announced that it had agreed to a multiyear extension of its existing strategic partnership with the National Football League (NFL). The two companies have worked together to provide fan experiences through Genius' distribution of official data and video content, and under the deal, the exclusive distribution deal Genius has with the NFL will last until the end of the 2027 to 2028 football season. Genius will continue to provide play-by-play statistics, proprietary next-generation statistical data, and the NFL's own official sports-betting data to media companies and sports-betting operators.
NYSE: GENI
Key Data Points
In the gambling world, time matters, and so Genius will also have the exclusive right to distribute low-latency live game feeds to sportsbooks in the U.S. and Canada through the official NFL Watch & Bet program. By leveraging its machine learning technology, Genius expects to offer gambling enthusiasts an augmented viewing experience they can appreciate.
Genius has previously looked at installing AI-powered tracking systems at soccer matches to capture more granular data, and these kinds of high-depth insights could be of value both to fans and to the teams themselves. The stock has a long way to go to return to its previous peak, but investors feel more confident in the company's prospects than they have in years.
