At 12:12 p.m. ET on Friday, shares of Rezolve AI (RZLV 4.66%) were up by a staggering 64.4% since last Friday's closing bell, according to data from S&P Global Market Intelligence. Most of the gain accumulated between Tuesday and Thursday. The maker of artificial intelligence (AI) tools that enhance shopping experiences had a busy week, with a couple of market-moving announcements.
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When a company calls itself undervalued
Earlier this week, Rezolve's management declared that the stock looked undervalued. Based on the market-darling valuations attributed to privately held AI developers Anthropic and Sierra AI, Rezolve should have a market cap of at last $3.6 billion -- and a $10 billion valuation would also be reasonable. Rezolve's market cap was $1.37 billion at the time.
The statement also reminded investors that Rezolve is a "strategic partner" of Microsoft and Alphabet. That part may have contributed most of the press statement's market impact.
The next move was more substantial. On Thursday, Rezolve announced and demonstrated a new shopping tool that lets you search for products by taking smartphone pictures of the item. It's a lot like Alphabet's Google Lens app, but its AI engine is specifically trained to identify items in a retailer's product catalog.
The result is plugged into a conversational model of generative AI, so the shopper can discuss everything from pricing and warranties to similar items in the store. Rezolve calls it this package Visual Search.
NASDAQ: RZLV
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The business reality behind the AI buzz
It's exciting stuff, and it helps to have tech titans like Alphabet and Anthropic available for service integration and general development discussions. That said, it's one thing to have a really cool AI tool, and another to build a successful business around it. Rezolve has a long way to go in that respect.
Founded in 2016, the British company reported a $172.6 million net loss in fiscal year 2024, based on $200,000 of total revenues. Rezolve's balance sheet held $9.5 million of cash and $48 million of short-term debt at the end of 2024. Interest expenses for these debt papers added up to $10.6 million. These are the freshest figures available, by the way -- Rezolve isn't in the habit of filing quarterly financial results.
If the new Visual Search product can find some platform partners and generate real money, Rezolve could embark on an inspiring growth journey. The nature of Microsoft's and Alphabet's engagement is unclear, so I don't know how quickly this can happen.
That's a massive "if," anyway. And even after this week's huge gains, share prices have gained just 6% over the last 52 weeks. It's a quick rebound from a deep hole. The company needs to prove its business worthy before I'll consider owning Rezolve stock.
