Appen Ltd (ASX: APX) shares are rallying 6.5% higher on Friday, trading at $6.71 apiece at the time of writing.
After a difficult year to date – where shares have faltered more than 40% into the red – the Appen share price has levelled off somewhat in April and is now 5% higher in the past month of trade.
In wider market moves, the S&P/ASX All Technology Index (ASX: XTX) is trading 4% higher on the day as tech shares stage a small rebound.
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What's up with the Appen share price?
Tech stocks continue to take a pummelling in 2022 amid a wave of macroeconomic headwinds.
The combination of soaring inflation, commodity and food prices, rising interest rates and tension in Europe have stirred equity markets this year, and tech stocks have felt the fallout the most.
The tech index is down more than 32% this year to date and has shown no signs of reversing course. Appen is down 40% in the same time, booking extensive losses for shareholders.
Analysts at Macquarie are baking in further downside for ASX tech shares, squashing the hopes of stock pickers hoping to grab a bargain, according to earlier reporting by my Foolish colleague Brendan Lau.
Appen's earnings were disappointing to those wanting to see a reversal in its share price. Broker JP Morgan downgraded its rating to neutral on the stock, due to the earnings miss.
The broker said in a note to clients that Appen's 2026 target to double revenue "seems very ambitious given management's recent track record".
"[L]ack of visibility on growth and heightened levels of reinvestment means we would prefer to stay on the sidelines until management starts delivering on their guidance," the broker added.
With market and broker sentiment showing a tilt towards the downside, alongside heavy weakness in the broad sector, a picture begins to form as to why Appen's share price appears to be in trouble.
Appen share price snapshot
In the last 12 months, the Appen share price has collapsed 40% into the red after losses continued into 2022.
