C3.ai (AI) is grabbing the spotlight today as the stock has surged by more than 15%. The market capitalization has doubled to $3.575 billion as the stock is trading at $31/share, a remarkable increase from its last closing price of $28. The company first came to public attention in late 2020 when its stock hit a high of over $150/share. But shortly afterward, the share price dropped and it was trading at $11 by January 2021.
Analysts have compared C3.AI to Palantir (NASDAQ:PLTR) owing to its defense contracts. Before the Nvidia earnings report came through, C3.AI was expecting a negative report from Bloomberg that detailed product delays and accused its founder Thomas Siebel of micromanagement. This along with the start of the Russia-Ukraine war did not help the company’s flagging stock. According the Tipranks, no less than 11 analysts have given the stock a “hold” rating which suggests that the stock is likely to remain flat in the coming year.
C3.AI is due to post its April quarter earnings report on May 31 and analysts expect revenue of $71 million and a loss of 17 cents/share. The company has reported a 36% growth in revenue for its latest fiscal year, but saw a drastic increase in the selling and administration costs leading to a loss of almost $193 million.
The firm is trying to capitalize on the current AI boom by launching a “generative AI” product in the Google Cloud marketplace. While C3.AI has gone through many ups and downs, investors should be aware that not all that sparkles is gold when it comes to investing.
About C3.AI: The company was founded by Thomas Siebel and is primarily a defense contractor, though it was initially created serve the energy industry. It has received contracts from different sectors including energy, defense, and healthcare.
About Thomas Siebel: Thomas Siebel is an American entrepreneur and business executive worth an estimated $3.6 billion. He founded Siebel Systems in 1990 and sold it to Oracle (NASDAQ:ORCL) in 2006. He is the CEO of C3.ai and leads the company’s strategic direction.
