Why Rezolve AI Stock Jumped 25% Wednesday Morning

Key Points

• Rezolve AI's revenue exploded to $6.3 million in the first half of fiscal 2025, up from just $1.2 million a year earlier.

• The company's annual recurring revenue hit $90 million year to date, with management targeting at least $150 million by year end (and $500 million next year).

• The stock's valuation seems too rich right now, even if you base calculations on those lofty recurring revenue targets.

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Shares of Rezolve AI (NASDAQ: RZLV) soared sky-high on Wednesday morning, boosted by a strong earnings report. The big gains didn't last long, though. After peaking at a 25.1% overnight jump just after the opening bell, Rezolve AI's stock fell back to a milder 2.8% gain by 1:15 p.m. ET.

Rezolve AI's morning surge by the numbers

Rezolve AI's sales skyrocketed to $6.3 million in the first half of fiscal year 2025, far above the $1.2 million reported in the same period of 2024. On the bottom line, unadjusted net losses increased from $0.09 to $0.25 per share.

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Investors shrugged off the deeply unprofitable net income line to focus on Rezolve AI's surging sales instead. The company added more support for that approach when it unveiled a $90 million total of annual recurring revenue (ARR) year-to-date. Guidance targets set the year-end ARR expectation to "at least $150 million," with room for upside surprises.

Image source: Getty Images.

The AI ambitions are maybe too huge

As might be expected of a company with "AI" in the name, Rezolve AI focuses on artificial intelligence. Its flagship product is the brainpowa platform, a large language model (LLM) tailored to boost clients' e-commerce businesses. The $150 million ARR target sure looks ambitious, but the optimism doesn't end there. Management also expects to hit ARR of $500 million in 2026.

The stock may be worth a cautious nibble if Rezolve AI can deliver on these lofty promises, but those targets look like a stretch. Today, Rezolve AI shares are trading at 8.1 times the $150 million annual revenue target. That would be reasonable for a proven tech giant with a history of large-scale operations. I'm not so sure about Rezolve AI's loose forecast for high-octane growth.

I'll watch this promising agentic AI stock from the sidelines for a few more half-year reports.

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Anders Bylund has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.