From Nasdaq: 2024-06-26 15:00:00

C3.ai AI shares have surged 14% in the last month, outperforming the IT Services industry by 18.1% and the Computer and Technology sector by 9.9%. The company’s fiscal 2024 bookings were primarily driven by AI application sales and the C3 AI platform, with a diverse range of clients contributing to its success.

Federal revenues for AI doubled year over year in fiscal 2024, with a significant increase in Federal agreements closed. The company’s strong portfolio and partnerships with major players like AWS, Google Cloud, and Microsoft MSFT have driven its clientele growth.

C3 Generative AI solutions are being widely adopted by various industries, including manufacturing, industrial, and military sectors. The platform’s availability on AWS and Google Cloud has facilitated its usage and led to successful deployments at notable companies like Dow, Holcim, and Con Edison.

Despite its recent successes, AI’s near-term prospects may be hampered by higher investments leading to margin pressures. The company anticipates increased revenue from its pay-as-you-go model but expects challenges in revenue performance obligations due to shorter-term transactions.

Investors are advised to wait for a better entry point as AI plans to aggressively invest to gain market share. The company’s premium valuation, with a forward Price/Sales ratio of 8.43X, indicates a stretched valuation compared to industry peers. With a Zacks Rank #3 (Hold), AI’s growth trajectory will be closely monitored by investors.



Read more at Nasdaq: C3.ai Shares Up 14% in a Month: What’s Next for AI Investors?