Rent the Runway shares : On Thursday, investors flocked to Rent the Runway stock, sending the price soaring by more than 220%. The turnaround occurred soon after the clothing rental company declared its intention to use AI techniques as a growth driver this year.

The stock, which had a market value of only $26.27 million earlier, saw trading activity jump well beyond normal norms, with nearly 34 million shares exchanged hands.

The move by Rent the Runway to use AI to improve company operations is in line with what many other organizations have been doing for the last year. Companies have been promoting their ambitions to use AI technologies to optimize their businesses, which has contributed to stock increases.

Revenue is expected to increase by 1% to 6% in the current fiscal year, according to the company’s estimate. This is a significant improvement from the 0.6% gain reported in 2023. Free cash flow breakeven is another something Rent the Runway plans to achieve.

As Running Point Capital Advisors’ head investment director Michael Ashley Schulman pointed out, Rent the Runway serves as an example for investors who see AI’s promise for companies big and small.

Rent the Runway’s market valuation increased by over $63.3 million as a consequence of 138.7 percent increase in share price to $17.82. To meet the minimum bid price criteria for continuing listing on the Nasdaq, the company conducted a one-for-20 reverse stock split last week; as a result, there are now around 2.6 million shares available for trading.

According to Ihor Dusaniwsky, managing director of predictive analytics at S3 Partners, the sudden surge in stock price was caused by intense buying interest in a stock with a low market capitalization.

Rent the Runway, famous for its designer goods, has persevered through quality problems and out-of-date product assortments. CEO Jennifer Hyman expressed optimism about the company’s future growth possibilities when she announced a 10% increase in the customer loyalty rate in the fourth quarter and announced plans to debut new designers in 2024.