Rising on the optimism of a transitioning education technology (edtech) landscape, shares of Genius Group (NYSEMKT:GNS) popped sharply higher on a joint venture (JV) deal with Groove Digital, a leading education-focused Software as a Service (SaaS) enterprise. Together, the two entities aim to deliver artificial intelligence-powered tools for the academic community. GNS stock initially gained 20% before settling just a hair lower at 19% up.
According to the accompanying press release, the two companies signed an agreement to launch a new AI-driven SaaS platform called Genius Groove Inc. Structured as a 50/50 ownership entity; the JV will integrate Groove Digital’s tools and Groove AI’s large language model engine with Genius Group’s GeniusU partner portal, a collaborative network focused on resource access.
Functionally, one of the key features undergirding Genius Groove is its AI-enhanced drag-and-drop element. This attribute will allow Genius Group associates and academic partners to quickly create and expand global classrooms. The new venture will also combine GeniusU’s freemium and premium course-building instruments with Groove’s comprehensive marketing, video, community-building, and online commerce tools.
Further, the chief executives of the two partnering enterprises stressed the expanded reach and improved efficiencies of the JV. Most importantly, investors took encouragement at the news, sending GNS stock skyward.
Credibility Issues Still Dog GNS Stock
On the surface, the JV should present a significant lift for both participating companies. For Groove Digital, the venture potentially allows for brand recognition as AI becomes further integrated into education. As for GNS stock, the partnership adds more value to the underlying enterprise.
Indeed, the trajectory of digital intelligence protocols only seems to be moving higher. According to Grand View Research, the global AI market size reached a valuation of $136.55 billion last year. Experts project that the segment will expand at a compound annual growth rate (CAGR) of 37.3% from 2023 to 2030. At the forecast culmination, sector revenue should hit $1.81 trillion.
Under this broad umbrella, the global AI in education market size reached a valuation of $1.82 billion in 2021. Per another report by Grand View Research, analysts project that this subsegment will expand at a CAGR of 36% from 2022 to 2030. At the culmination, sector revenue should clock in at $32.27 billion.
Given the massive total addressable market for Genius and its plans to take a (large) piece of the pie, GNS stock shot higher. Nevertheless, it’s an incredibly risky idea.
While GNS stock popped up 225% since the January opener, it lost about 53% in the trailing one-year period. Since making its public market debut, Genius shares collapsed to the tune of approximately 87%. Essentially, GNS should only be on the radar of professional speculators.
Why It Matters
At the moment, no Wall Street analyst covers GNS stock, which isn’t all that surprising. Priced at a little over a buck, GNS inherently warrants extreme caution. In addition, its present market capitalization sits at $39.45 million, below the nano-cap threshold of $50 million.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
