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Why Box Inc. Stock Popped Today

Steve Symington, The Motley Fool

What happened

Shares of Box Inc. (NYSE: BOX) popped 11.6% on Monday after the cloud content management specialist received a vote of confidence from a hedge fund manager.

Speaking the Sohn Investment Conference today, Social Capital CEO Chamath Palihapitiya argued that Box is a "really interesting disruptive company," calling the stock "incredibly cheap and undervalued."

Wall Street sign with American flags in the background

IMAGE SOURCE: GETTY IMAGES.

So what

Palihapitiya explained that Box "sits on top of an enormous amount of R&D," particularly in the artificial intelligence (AI) space.

For perspective, last October, Box unveiled an AI toolkit dubbed Box Skills, enabling customers to use AI and machine-learning tools from companies like Google, Microsoft, and IBM to better manage and extract data from multimedia files -- for example, the ability to automatically tag photos, or to transcribe audio and identify topics and people from video files.

Now what

Perhaps most intriguing, Palihapitiya insisted that investors take a long-term view of artificial intelligence stocks in general -- something AI investors can certainly appreciate here at the Fool.

"It's really critical to understand what AI is, what it can do, what it can't do, and who is actually positioned to create incredibly value over the next 10 to 20 years," he stated.

That said, I'll reiterate that long-term shareholders probably shouldn't pay much attention to short-term movements like this one. But it's no surprise to see the stock jumping given this encouraging view.

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Teresa Kersten is an employee of LinkedIn and is a member of The Motley Fool's board of directors. LinkedIn is owned by Microsoft. Steve Symington has no position in any of the stocks mentioned. The Motley Fool is short shares of IBM. The Motley Fool has a disclosure policy.