Shares of web browser company Opera (NASDAQ: OPRA) were rallying this week, up 23.3% through 11:25 a.m. ET Friday, according to data from S&P Global Market Intelligence.

Opera delivered great news for shareholders this week, reporting strong second-quarter earnings that came in ahead of analyst expectations. In addition, commentary on the positive potential impact from recent regulations in Europe and the U.S. may have tantalized investors with more long-term upside.

Search and ad growth were strong, but is it just the beginning?

In the quarter, Opera delivered 17% revenue growth to $109.7, and earnings per share of $0.22, up 46.7%, with both figures beating analyst estimates. Opera also raised guidance for the full year.

Opera is an internet browser company, and is a small, independent fish in a very, very big pond dominated by tech giants. However, management has recently been successful in targeting customers in higher-revenue territories like the U.S., Europe, and Latin America, and pivoting away from its initial target markets in low-revenue emerging markets.

While total MAUs actually decreased, the company’s average revenue per user, gleaned from both digital advertising and search revenue through the browser, rose 25% in the quarter.

And the opportunity in these high-end markets may be getting bigger. New laws like the Digital Markets Act in Europe are cracking down on technology “gatekeepers” who have the power to push their preferred or owned browser or search engine. Alphabet, the owner of the Chrome browser, was also just declared a monopoly by a federal judge in the U.S.

While it’s hard to say exactly how this will open up opportunities for Opera, it’s possible tech giants will be forced to offer users more choice for default browsers in PCs and smartphones. Opera’s results point to it successfully making more inroads in these geographies.

Could Opera’s upside be really big?

On the conference call, Opera’s management noted that the shifting regulatory regimes, as well as the artificial intelligence (AI) transition, are opening up growth opportunities. Co-CEO Lin Song said:

We have a few percent of market share with the browser, but then if you look at some bigger player like Google, like it’s [a] $2 trillion company, even 1% of it is $20 billion, right? We’re only like $1 billion. So we feel that there’s at least 10 times, 20 times potential we can do if we capture these shifting paradigms, which is our focus.

To that end, Opera has been investing in new technologies, such as investing $19 million in a large AI cluster in Iceland. That AI cluster has only been up and running for a few months, but management spoke positively of it. One use case, for instance, is to allow users to fine-tune outside open-source AI models with Opera’s AI.

While it’s early days for that particular investment, Opera’s status as a neutral browser, its popularity with gamers, and its commitment to staying current with AI technology bodes well for its future.

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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Billy Duberstein and/or his clients have positions in Alphabet. The Motley Fool has positions in and recommends Alphabet. The Motley Fool has a disclosure policy.