Why Amplitude Stock Jumped 35% in May

Shares of Amplitude (NASDAQ: AMPL) moved higher last month after the product analytics cloud software company delivered a better-than-expected first-quarter earnings report, teased its upcoming artificial intelligence (AI) agent launch for June 10, and benefited from the broader recovery in the stock market as worries about a recession faded.

According to data from S&P Global Market Intelligence, Amplitude's stock price increased 35% in May. As you can see from the chart below, the stock surged following the earnings report and continued to rise in response to macroeconomic tailwinds.

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AMPL data by YCharts.

Amplitude builds momentum

Amplitude stock jumped 19% on May 8 after the company released its earnings report, which showed another quarter of accelerating growth following an earlier slowdown.

Revenue in the quarter rose 10% to $80 million, slightly ahead of estimates at $79.76 million. On the bottom, it reported break-even adjusted earnings per share, which beat estimates by a penny. However, other key metrics seemed to better showcase the company's underlying growth. Remaining performance obligations (RPO) rose 30% to $325.9 million, showing that customers are signing longer contracts, a reflection of greater confidence from its customers. It's also seeing higher attach rates as it introduces more new product features, which help drive the company's growth over the long term.

After adding several new features, including Session Replay and Guides & Surveys, Amplitude can now offer everything customers want from its product analytics platform, preventing them from having to supplement it with point solutions.

On May 12, the stock jumped, gaining 13% after the U.S. and China agreed to lower their tariff rates. While that news doesn't have direct implications for Amplitude, as a relatively young software company that is still unprofitable on a generally accepted accounting principles (GAAP) basis, Amplitude is sensitive to the overall economy, and lower tariff rates make a recession less likely.

Image source: Getty Images.

What's next for Amplitude

Amplitude's AI agent launch next week could be a game-changer for the company, helping it further separate itself from the competition. For the full year, the company is targeting revenue of $329 million to $333 million, up 10.6% at the midpoint, and adjusted earnings per share of $0.05 to $0.10.

After struggling in the post-pandemic era, Amplitude is seeing traction with its customer base and product suite. There's still a large addressable market for the company to tackle, and the AI agent launch could help it get there.

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Jeremy Bowman 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.