Shares of Chegg Inc. dropped sharply on Monday after the education technology company announced that its outlook has been hindered due to OpenAI’s CHATGPT chatbot. During after-hours trading, the stock shot down to $11.86, representing a 33% decline.
Chegg began to observe an increase in the public’s interest in AI technology back in March. For the current quarter, the company clarified revenue expectations between $175 million and $178 million, and gross margin to be around 65%. Operating margin for the second quarter will be 28-30%, which is lower than projected due to the extra expenses associated with the advancement and adoption of new AI technologies.
The company also announced a new Artificial Intelligence and Machine Learning (AIML) division to boost AI development within the organization. In addition, CEO Dan Rosensweig revealed that AI will enable Chegg to provide an improved educational service in the future.
Sabela Ojea is an experienced journalist with a master’s degree in the field. She has contributed to many digital resources, such as CBS News and HuffPost. She is well aware of the importance of AI in the education sector, having reported on its various advantages and advantages. Sabela also has a keen interest in technology and its remarkable capacity to shape our future.
