diff --git a/public/app/plugins/datasource/loki/components/LokiContextUi.tsx b/public/app/plugins/datasource/loki/components/LokiContextUi.tsx
index 76a0068ad07..859a715845d 100644
--- a/public/app/plugins/datasource/loki/components/LokiContextUi.tsx
+++ b/public/app/plugins/datasource/loki/components/LokiContextUi.tsx
@@ -5,7 +5,7 @@ import { useAsync } from 'react-use';
 
 import { GrafanaTheme2, LogRowModel, SelectableValue } from '@grafana/data';
 import { reportInteraction } from '@grafana/runtime';
-import { MultiSelect, Tag, Tooltip, useStyles2 } from '@grafana/ui';
+import { LoadingPlaceholder, MultiSelect, Tag, Tooltip, useStyles2 } from '@grafana/ui';
 
 import LokiLanguageProvider from '../LanguageProvider';
 import { ContextFilter } from '../types';
@@ -35,6 +35,19 @@ function getStyles(theme: GrafanaTheme2) {
         overscroll-behavior: contain;
       }
     `,
+    loadingPlaceholder: css`
+      margin-bottom: 0px;
+      float: right;
+      display: inline;
+      margin-left: auto;
+    `,
+    textWrapper: css`
+      display: flex;
+      align-items: center;
+    `,
+    hidden: css`
+      visibility: hidden;
+    `,
   };
 }
 
@@ -51,6 +64,7 @@ export function LokiContextUi(props: LokiContextUiProps) {
   const [contextFilters, setContextFilters] = useState<ContextFilter[]>([]);
 
   const [initialized, setInitialized] = useState(false);
+  const [loading, setLoading] = useState(false);
   const timerHandle = React.useRef<number>();
   const previousInitialized = React.useRef<boolean>(false);
   const previousContextFilters = React.useRef<ContextFilter[]>([]);
@@ -75,8 +89,10 @@ export function LokiContextUi(props: LokiContextUiProps) {
     if (timerHandle.current) {
       clearTimeout(timerHandle.current);
     }
+    setLoading(true);
     timerHandle.current = window.setTimeout(() => {
       updateFilter(contextFilters);
+      setLoading(false);
     }, 1500);
 
     return () => {
@@ -134,7 +150,7 @@ export function LokiContextUi(props: LokiContextUiProps) {
 
   return (
     <div className={styles.multiSelectWrapper}>
-      <div>
+      <div className={styles.textWrapper}>
         {' '}
         <Tooltip
           content={
@@ -153,6 +169,7 @@ export function LokiContextUi(props: LokiContextUiProps) {
           />
         </Tooltip>{' '}
         Select labels to be included in the context query:
+        <LoadingPlaceholder text="" className={`${styles.loadingPlaceholder} ${loading ? '' : styles.hidden}`} />
       </div>
       <div>
         <MultiSelect
diff --git a/public/app/plugins/datasource/loki/datasource.ts b/public/app/plugins/datasource/loki/datasource.ts
index a0e9fc43883..7f0b2f45b32 100644
--- a/public/app/plugins/datasource/loki/datasource.ts
+++ b/public/app/plugins/datasource/loki/datasource.ts
@@ -137,6 +137,7 @@ export class LokiDatasource
   private streams = new LiveStreams();
   languageProvider: LanguageProvider;
   maxLines: number;
+  onContextClose: (() => void) | undefined;
 
   constructor(
     private instanceSettings: DataSourceInstanceSettings<LokiOptions>,
@@ -789,53 +790,60 @@ export class LokiDatasource
   }
 
   getLogRowContextUi(row: LogRowModel, runContextQuery: () => void): React.ReactNode {
-    return LokiContextUi({
-      row,
-      languageProvider: this.languageProvider,
-      onClose: () => {
-        this.prepareContextExpr = this.prepareContextExprWithoutParsedLabels;
-      },
-      updateFilter: (contextFilters: ContextFilter[]) => {
-        this.prepareContextExpr = async (row: LogRowModel, origQuery?: DataQuery) => {
-          await this.languageProvider.start();
-          const labels = this.languageProvider.getLabelKeys();
+    const updateFilter = (contextFilters: ContextFilter[]) => {
+      this.prepareContextExpr = async (row: LogRowModel, origQuery?: DataQuery) => {
+        await this.languageProvider.start();
+        const labels = this.languageProvider.getLabelKeys();
 
-          let expr = contextFilters
-            .map((filter) => {
-              const label = filter.value;
-              if (filter && !filter.fromParser && filter.enabled && labels.includes(label)) {
-                // escape backslashes in label as users can't escape them by themselves
-                return `${label}="${escapeLabelValueInExactSelector(row.labels[label])}"`;
-              }
-              return '';
-            })
-            // Filter empty strings
-            .filter((label) => !!label)
-            .join(',');
-
-          expr = `{${expr}}`;
-
-          const parserContextFilters = contextFilters.filter((filter) => filter.fromParser && filter.enabled);
-          if (parserContextFilters.length) {
-            // we should also filter for labels from parsers, let's find the right parser
-            if (origQuery) {
-              const parser = getParserFromQuery((origQuery as LokiQuery).expr);
-              if (parser) {
-                expr = addParserToQuery(expr, parser);
-              }
+        let expr = contextFilters
+          .map((filter) => {
+            const label = filter.value;
+            if (filter && !filter.fromParser && filter.enabled && labels.includes(label)) {
+              // escape backslashes in label as users can't escape them by themselves
+              return `${label}="${escapeLabelValueInExactSelector(row.labels[label])}"`;
             }
-            for (const filter of parserContextFilters) {
-              if (filter.enabled) {
-                expr = addLabelToQuery(expr, filter.label, '=', row.labels[filter.label]);
-              }
+            return '';
+          })
+          // Filter empty strings
+          .filter((label) => !!label)
+          .join(',');
+
+        expr = `{${expr}}`;
+
+        const parserContextFilters = contextFilters.filter((filter) => filter.fromParser && filter.enabled);
+        if (parserContextFilters.length) {
+          // we should also filter for labels from parsers, let's find the right parser
+          if (origQuery) {
+            const parser = getParserFromQuery((origQuery as LokiQuery).expr);
+            if (parser) {
+              expr = addParserToQuery(expr, parser);
+            }
+          }
+          for (const filter of parserContextFilters) {
+            if (filter.enabled) {
+              expr = addLabelToQuery(expr, filter.label, '=', row.labels[filter.label]);
             }
           }
-          return expr;
-        };
-        if (runContextQuery) {
-          runContextQuery();
         }
-      },
+        return expr;
+      };
+      if (runContextQuery) {
+        runContextQuery();
+      }
+    };
+
+    // we need to cache this function so that it doesn't get recreated on every render
+    this.onContextClose =
+      this.onContextClose ??
+      (() => {
+        this.prepareContextExpr = this.prepareContextExprWithoutParsedLabels;
+      });
+
+    return LokiContextUi({
+      row,
+      updateFilter,
+      languageProvider: this.languageProvider,
+      onClose: this.onContextClose,
     });
   }