Appen's (ASX:APX) third-quarter underlying earnings before interest, tax, depreciation, and amortization were driven by improvements in the China business, while the US business, including large language models, was further impacted by volatility due to the dynamic US artificial intelligence market, said Jefferies in a Friday note.

The company on Thursday reported a revenue of $55.3 million in the quarter ended Sept. 30, up 2% compared with the revenue reported in the prior corresponding period.

Jefferies believes that earnings visibility is limited for the company, especially in large language model projects.

Jefferies maintained a hold rating on Appen with a price target of AU$1.

The company's shares were down nearly 1% in recent Friday trade.