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Is It The Right Time to Invest in AI Stock?


Based out of California, C3.ai, Inc. (NYSE: AI) is an enterprise artificial intelligence (AI) company, which provides software-as-a-service (SaaS) applications that help its customers to develop, deploy, and operate large-scale Enterprise AI applications across any infrastructure.

C3.ai’s clients include Shell (NYSE: SHEL), Bank of America (NYSE: BAC), the U.S. Air Force, Koch Industries, Enel (NYSE: ENIA) and ENGIE (ENGIY), among others. Some of the company’s partners are Google (NASDAQ: GOOGL), Microsoft (NASDAQ: MSFT), Amazon (NASDAQ: AMZN), Raytheon (NYSE: RX), and Baker Hughes (NASDAQ: BKR).

The company went public and got listed on the New York Stock Exchange on December 8, 2020.

With its initial public offering (IPO) priced at $42 per share, C3.ai was one of the hottest listings of 2020. The stock skyrocketed to $140 in the next two days of its listing and touched a high of $183.90 within a few weeks.

Q3 Results

On March 2, C3.ai announced excellent results for the fiscal third quarter ended January 31. It reported an adjusted loss of $0.07 per share, lower than the Street’s loss estimate of $0.26 per share and the year-ago loss of $0.13 per share.

Total revenues rose 42% year-over-year to $69.8 million, and subscription revenue grew 34% to $57.1 million.

The company ended the quarter with over $1 billion in cash, cash equivalents, and investments.

The CEO of C3.ai, Thomas M. Siebel, said, “These results were driven by substantially increased sales momentum due to the successful refocusing of our sales organizations, expanded customer count, increased industry diversification for our AI products and the further recognition of our technology leadership in this industry.”

“We remain confident in our long-term prospects based on our accelerating progress and the magnitude of the addressable enterprise AI market opportunity. Given these trends and our progress to date, we have raised our Fiscal Year 2022 guidance to reflect revenue growth of 38% over the Fiscal Year 2021,” Siebel added.

For the Fiscal Year 2022, the company anticipates revenues of $252 million.

Q4 Expectations

The AI solutions provider is scheduled to release its results for the fourth quarter and full Fiscal Year 2022 on June 1. Analysts expect C3.ai to register a loss of $0.29 per share in the fourth quarter.

Consensus Rating

Based on three Buys, three Holds and two Sells, the stock has a Hold consensus rating. AI’s average price target of $26.13 implies 43.4% upside potential from current levels.

Bloggers’ Stance

TipRanks data shows that financial blogger opinions are 79% Bullish on AI, compared to the sector average of 68%.

Conclusion

The stock has lost 69.4% over the past year and 51.1% in the last three months. I think this could be a good time to invest in the stock as the global AI market is projected to witness a compounded annual growth rate (CAGR) of 20.1% over the next few years to surpass $1.3 trillion by 2029.

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