What Happened?

Shares of work management software maker Asana (ASAN) jumped 9.2% in the morning session after Piper Sandler analyst Brent Bracelin upgraded the stock's rating from Neutral to Overweight (Buy) and raised the price target from $19 to $27. The upgrade was based on "the company's stabilization, cost management, and promising AI innovations."

The shares closed the day at $21.79, up 5.7% from previous close. 

What The Market Is Telling Us

Asana’s shares are very volatile and have had 27 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business. 

The previous big move we wrote about was 10 days ago when the stock dropped 5.1% on the news that the major indices declined sharply (Nasdaq down 1.9%, S&P 500 down 1.1%) as investors appeared to be locking in some gains in a year marked by significant progress in the Fed's effort to deliver a soft landing—taming inflation without causing more damage to the economy—despite early signs of weakness in the labor market. With two more trading days to wrap up the year, investors are likely hoping for a "Santa Claus Rally." 

The Nasdaq rose roughly 30% while the S&P 500 gained over 25%, reflecting the resilience of the U.S. economy. The improved momentum, especially in the second half of the year, was fueled by the ongoing investment in AI within the tech sector, the Fed's continued dovish shift as inflation cooled, enabling the Powell-led committee to deliver three rate cuts (0.5% in September and 0.25% each in November and December). 

Additionally, the November 2024 elections sparked optimism for more business-friendly regulations in energy, tech, and industrials following Donald Trump's return to the presidency. Nonetheless, the outlook for 2025 remains clouded by the pace and magnitude of future rate cuts as well as potential changes in trade policy and corporate taxes once the Trump administration takes over. The path forward is marked by uncertainty.

Asana is up 10.2% since the beginning of the year, but at $21.88 per share, it is still trading 20.5% below its 52-week high of $27.52 from December 2024. Investors who bought $1,000 worth of Asana’s shares at the IPO in September 2020 would now be looking at an investment worth $759.72. 

Unless you’ve been living under a rock, it should be obvious by now that generative AI is going to have a huge impact on how large corporations do business. While Nvidia and AMD are trading close to all-time highs, we prefer a lesser-known (but still profitable) semiconductor stock benefiting from the rise of AI. Click here to access our free report on our favorite semiconductor growth story.