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- Rubrik stock closes up 15.6% in IPO on Thursday.
- Cybersecurity firm sold 23.5 million shares of RBRK, raising over $780 million.
- Microsoft, its most significant backer, sold off on Thursday before rallying on earnings afterhours.
- Firm resistance arrives between $39 and $40 for RBRK.
Rubrik (RBRK), a cybersecurity firm backed by Microsoft (MSFT), saw its stock ignore the broad market downturn on Thursday to become the bright spot in a melancholy landscape. RBRK stock closed its first session at $37.00 for a 15.6% gain.
For its part, Microsoft traded 2.5% lower during the regular session, losing its perch above the $400 level after bleak GDP and higher inflation prints sent traders to the exits to cash in their chips. The S&P 500 lost about a half a percent, while the Dow Jones sold off close to 1%. The NASDAQ declined in between their results.
Microsoft stock then advanced 4% afterhours following its quarterly earnings release. The company solidly surpassed consensus estimates from Wall Street for the quarter.
US Q1 GDP arrived at a 1.6% YOY reading early Thursday. This was much lower than the 2.5% expected reading or the 3.4% annual print from the previous quarter in late 2023. US Treasury yields expanded higher on Thursday, leading to an exodus on the stock market.
Rubrik stock news: A good day all around
Rubrik’s three co-founders each walked away with close to half a billion dollars apiece on Thursday as the cybersecurity company opened well above its $32 IPO price.
RBRK stock opened at $38.60 before reaching an intraday high of $40. Shares did not trade much below $36 throughout the session, although early exuberance dissipated.
Rubrik raised over $750 million from the IPO, which was initially priced between $28 and $31 per share before being raised to $32 at the last minute.
In its most recent quarter, Rubrik saw annual recurring revenue rise nearly 50% to $784 million.
Rubrik, co-founded by Bipul Sinha, Arvind Jain and Arvind Nithrakashyap, sold 23.5 million shares for the IPO, but underwriters have another month to purchase an additional 3.5 million or so shares if they so choose.
Besides its relationship to Microsoft, Rubrik also touts a partnership with Crowdstrike’s (CRWD) industry-leading Falcon cybersecurity platform.
AI stocks FAQs
First and foremost, artificial intelligence is an academic discipline that seeks to recreate the cognitive functions, logical understanding, perceptions and pattern recognition of humans in machines. Often abbreviated as AI, artificial intelligence has a number of sub-fields including artificial neural networks, machine learning or predictive analytics, symbolic reasoning, deep learning, natural language processing, speech recognition, image recognition and expert systems. The end goal of the entire field is the creation of artificial general intelligence or AGI. This means producing a machine that can solve arbitrary problems that it has not been trained to solve.
There are a number of different use cases for artificial intelligence. The most well-known of them are generative AI platforms that use training on large language models (LLMs) to answer text-based queries. These include ChatGPT and Google’s Bard platform. Midjourney is a program that generates original images based on user-created text. Other forms of AI utilize probabilistic techniques to determine a quality or perception of an entity, like Upstart’s lending platform, which uses an AI-enhanced credit rating system to determine credit worthiness of applicants by scouring the internet for data related to their career, wealth profile and relationships. Other types of AI use large databases from scientific studies to generate new ideas for possible pharmaceuticals to be tested in laboratories. YouTube, Spotify, Facebook and other content aggregators use AI applications to suggest personalized content to users by collecting and organizing data on their viewing habits.
Nvidia (NVDA) is a semiconductor company that builds both the AI-focused computer chips and some of the platforms that AI engineers use to build their applications. Many proponents view Nvidia as the pick-and-shovel play for the AI revolution since it builds the tools needed to carry out further applications of artificial intelligence. Palantir Technologies (PLTR) is a “big data” analytics company. It has large contracts with the US intelligence community, which uses its Gotham platform to sift through data and determine intelligence leads and inform on pattern recognition. Its Foundry product is used by major corporations to track employee and customer data for use in predictive analytics and discovering anomalies. Microsoft (MSFT) has a large stake in ChatGPT creator OpenAI, the latter of which has not gone public. Microsoft has integrated OpenAI’s technology with its Bing search engine.
Following the introduction of ChatGPT to the general public in late 2022, many stocks associated with AI began to rally. Nvidia for instance advanced well over 200% in the six months following the release. Immediately, pundits on Wall Street began to wonder whether the market was being consumed by another tech bubble. Famous investor Stanley Druckenmiller, who has held major investments in both Palantir and Nvidia, said that bubbles never last just six months. He said that if the excitement over AI did become a bubble, then the extreme valuations would last at least two and a half years or long like the DotCom bubble in the late 1990s. At the midpoint of 2023, the best guess is that the market is not in a bubble, at least for now. Yes, Nvidia traded at 27 times forward sales at that time, but analysts were predicting extremely high revenue growth for years to come. At the height of the DotCom bubble, the NASDAQ 100 traded for 60 times earnings, but in mid-2023 the index traded at 25 times earnings.
Rubrik stock chart
Traders will be curious to discover how price action unfolds for Rubrik on Friday. The $37 threshold has appeared to be a support level for RBRK stock throughout its initial session. The $39 to $40 level acted as resistance early on, and the final rally of the day petered out at $38. So far, traders are sticking to the integers for comfort.
RBRK 5-minute stock chart
