Shares of this digital medical platform jumped more than 100% overnight. Here’s why

Shares of digital medical platform Doximity skyrocketed over 100% overnight on Friday after CEO Jeffrey Tangney made bold comments about the company's new AI search tool. During the company's first-quarter fiscal 2027 earnings call, Tangney stated that the AI search product generates 10 times the revenue it costs to operate. He added that unit economics look promising as AI costs may decrease over time as models become more efficient.

Pre-market trading saw Doximity shares up more than 130% before settling to a 55% increase as the market officially opened. Analysts believe this surge doesn't yet reflect in the company's strong financials, with Doximity reporting revenues of $156.6 million and adjusted EBITDA of $74.8 million, both exceeding expectations. The company also raised its full-year revenue guidance by $6 million, or 5%, to between $671 million and $681 million, but analysts think the AI profitability potential isn't part of the forecast.

Doximity's market value stood at $3.7 billion before the surge, but shares were down 50% for the year prior to the results. Tangney expressed optimism about the potential for higher margins and an expanded addressable market through AI search. Despite the positive outlook, short sellers face increased pressure as about 17% of shares available for trading were sold short ahead of the earnings results, and their attempts to unwind positions likely contributed to the stock's surge.