Elastic acquires Jina AI to boost AI search capabilities

SAN FRANCISCO - Elastic (NYSE:ESTC), a technology company with a market capitalization of $8.84 billion and impressive revenue growth of 17.42% over the last twelve months, announced Thursday it has completed the acquisition of Jina AI, a company specializing in open source multimodal and multilingual embeddings, reranker, and small language models.According to InvestingPro analysis, Elastic maintains strong financial health with 8 key insights available to subscribers, including positive earnings expectations for the coming year.

The acquisition aims to enhance Elastic’s capabilities in vector search, retrieval-augmented generation (RAG), and context engineering, strengthening its position in the search AI market. While financial terms were not disclosed, Elastic’s strong balance sheet position, with a healthy current ratio of 2.09 and more cash than debt, suggests financial flexibility for strategic acquisitions.

Jina AI’s technology brings dense vector, multilingual and multimodal embeddings models that can process both text and images to Elastic’s platform, complementing its existing ELSER model. The acquisition also adds advanced rerankers to improve retrieval quality for visual and long-context multilingual documents.

"Search is the foundation of generative AI," said Ash Kulkarni, CEO of Elastic. "Jina AI’s team and technology bring cutting-edge models into the Elastic ecosystem, making our platform even more powerful for context engineering."

Han Xiao, former CEO of Jina AI who has been appointed VP of AI at Elastic, stated that joining Elastic would allow the company to scale its mission globally and bring advanced models directly into real-world applications.

Elastic plans to continue Jina AI’s practice of releasing models on Hugging Face and publishing academic research. For enterprise use, these models will be available through the Elastic Inference Service on Elastic Cloud, enabling customers to run embeddings and rerankers alongside Elastic’s vector database.

The acquisition also expands Elastic’s team of AI researchers, which the company says will accelerate its model innovation efforts. With a robust gross profit margin of 75.29% and trading near its InvestingPro Fair Value, Elastic appears well-positioned for future growth. For detailed analysis and additional insights, investors can access the comprehensive Pro Research Report available on InvestingPro, which covers over 1,400 US stocks including Elastic.

In other recent news, Elastic reported significant developments that have caught the attention of investors and analysts alike. The company announced a 20% growth in total revenue for the first quarter, surpassing investor expectations of 17% and exceeding the high end of guidance by 4.3%. This marks Elastic’s largest earnings beat in over three years. Following these robust results, several analyst firms have adjusted their price targets for Elastic. UBS increased its price target to $125, maintaining a Buy rating, while Oppenheimer raised its target to $119 with an Outperform rating. TD Cowen adjusted its price target to $105, citing strong quarterly performance, particularly in cloud revenues. RBC Capital also raised its price target to $125, pointing to cloud acceleration and a strong start to the fiscal year 2026. Additionally, Elastic has expanded its AutoOps monitoring service to self-managed deployments at no extra cost, allowing enterprise customers enhanced access to diagnostics and performance tuning. These recent developments highlight Elastic’s strong market position and operational advancements.

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