Opera extends losses despite Aria AI browser debut

Shares of Norwegian technology company Opera (OPRA.US) are already losing nearly 50% from their July peaks, when the euphoria around AI development was at the peak. In the fall of 2022, the company announced a partnership with OpenAI, the Microsoft-backed company behind ChatGPT. Despite yesterday's unveiling of the Aria browser, in which it has implemented broad AI options, the company's shares have not budged and are deepening declines of another 2.5% today. Next Thursday, August 24, the company will report results a day after Nvidia's quarterly report (NVDA.US). Opera had 336 million active users in Q1 2023.

• Opera said it has integrated a generative artificial intelligence service with its proprietary Composer architecture and GPT power, from OpenAI. Ultimately, the browser is expected to help with code generation, product queries, information retrieval or text generation. The browser is currently used by about 1 million people.
• The company has virtually no debt, and its current P/E ratio is about 35, with a P/B of about 2. The company's core business is related to the advertising industry - in its Q2 results, Wall Street will primarily pay attention to the browser's user growth and the revenues and margins that follow.

Opera's gross margin has been declining since 2020, although recent months have seen a rebound in net margin, which now stands at 11.5% - still well below the average of the past few years. Source: Macrotrends

In the fall of 2022, Opera held just 3% of the browser market share.Investors hope that a partnership with OpenAI will make the company increase its market share. Source: EnterpriseApps, Opera

Source:xStation5