Investors are watching RUM’s AI-driven growth from its $13.7-billion Anthropic deal, data center expansion, and rising short interest.
- RUM expects Q3 revenue of $87 million to $93 million, compared with analysts’ estimate of $88.7 million.
- Last month, Lake Street initiated coverage with a ‘Buy’ rating and a $25 price target, citing RUM’s AI infrastructure expansion.
- RUM’s short interest has also reached a record 8.8%.
RUM Group Inc. (RUM) stock gained overnight as retail investors looked ahead to Wednesday’s third-quarter (Q3) earnings, betting that its AI infrastructure expansion and $13.7 billion Anthropic agreement could drive revenue growth. Investors will watch for updates on Quake AI, data center operations and the company’s ability to convert major contracts into revenue.
RUM Group stock traded 1.96% higher overnight ahead of Wednesday.
RUM Q3 Earnings And Revenue Expectations
RUM is scheduled to publish its Q3 results before U.S. markets open on Wednesday. The company previously guided quarterly revenue between $87 million and $93 million, against analysts’ consensus estimate of $88.7 million, according to Fiscal.ai.
Rumble has been expanding beyond its original video-sharing operations to establish a presence in the AI computing market. The transformation became evident in June, when the company completed an approximately $767-million all-stock acquisition of German cloud computing provider Northern Data.
RUM’s operations now include two primary divisions: the Rumble video platform and Quake AI, which focuses on providing computing infrastructure for artificial intelligence (AI) workloads.
In Q2, RUM reported its highest-ever quarterly revenue of $40.4 million, up 61% and above analysts’ estimate of $30.66 million. Northern Data contributed $10.1 million, while the video business brought in $30.3 million, up 21%.
In Q3, Northern Data reported €59 million in revenue ($65.88 million) compared to just €8 million last year.
Anthropic Agreement Adds Long-Term Visibility For RUM
Last month, Lake Street initiated coverage of RUM with a ‘Buy’ rating and a $25 price target. The analyst believes investors have not fully recognized the value of the company’s shift toward AI data centers and cloud infrastructure.
The firm also highlighted RUM’s plan to enter the neocloud market and its purchase of 250 megawatts of power from Northern Data to support its data center expansion. A major development supporting growth is its six-year commercial arrangement with Anthropic, valued at an estimated $13.7 billion.
Also, according to Koyfin data, RUM’s short interest is at an all-time high of 8.8%, which could trigger a stock rise on strong earnings.
What Are RUM Retail Traders Saying
On Stocktwits, retail sentiment around the stock turned ‘bullish’ from ‘neutral.’
A user listed RUM’s catalysts, saying, Rumble’s six-year agreement with Anthropic, analysts seeing a 259% jump in Q3 revenue, and high short interest could help drive the stock higher.
Another user said, “With ND[Northern Data] posting earnings of around $68M , and assuming rumble stays on track of last quarter 30M , very well could have our first 100M quarter . A big beat over the expected combined 88M-93M.”
A third user said, “with short interest at an ALL TIME HIGH of 35 million short shares and 84% of the public float not held by Tether or insiders, I would not be surprised if we get price back to the $11-12 gap fill tomorrow. THEN the short squeeze STARTS. Let that sink in shorts.”
RUM stock has declined 19% year-to-date.
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