Where Will C3 ai Stock Be in 1 Year? The Motley Fool

A financial services firm would want real-time interest rate data in the mix, for instance. But it’s the domain-specific, enterprise data that promises to make generative AI so transformative for businesses. Image Generation is a process of using deep learning algorithms such as VAEs, GANs, and more recently Stable Diffusion, to create new images that are visually similar to real-world images. Image Generation Yakov Livshits can be used for data augmentation to improve the performance of machine learning models, as well as in creating art, generating product images, and more. Despite C3.ai operating in an industry that many might assume would be high-growth, C3.ai isn’t generating much growth. In the latest quarter, revenue rose about 11% to $72.4 million, and management issued guidance for about 19% growth in Q2.

For the full year, revenue is on pace to roughly double over last year, and analysts see the company growing the top line another 48% next year. Worldwide spending on AI-centric systems, such as hardware, software, and services needed for AI, is projected to grow nearly 27% this year to reach $154 billion, according to IDC. C3.ai’s revenue rose 17% in fiscal 2021 (which ended in April 2021), and it grew another 38% in fiscal 2022. But in fiscal 2023, its revenue only climbed 6% to $267 million as it faced two major challenges.

Enterprise Access Controls

However, as an investor you always want to be confident that a company has a clear path to profitability. Despite pulling in roughly one-fourth as much revenue, C3.ai reported an operating loss similar in size to UiPath’s during the three months ended July 30. But then, investors may want to wait for that growth to materialize before buying this AI stock given its expensive valuation and the challenges it’s facing. Analysts expect Nvidia to report total revenue of $16 billion this year, which is in line with company guidance.

First released in March 2023, C3’s initial generative AI models have already been adopted by large companies such as Georgia-Pacific LLC, Flint Hills Resources LLC, Nucor Corp., Consolidated Edison Inc. and the U.S. Customers can now view and purchase all C3 AI products on Google Cloud Marketplace by simply searching and transacting on the platform itself. Marketplace allows interested parties to standardize multiple purchasing functions into a single step, including negotiation and deployment. The Yakov Livshits Product Suite enables users to ask complex questions about their data and get answers through a simple user interface that everyone across the organization knows how to use.

The stock’s valuation remains expensive

This new collaboration on generative AI is a natural extension of C3 AI’s partnership with AWS. For example, Georgia-Pacific uses C3 AI Reliability running on AWS to improve the operations of their paper machines and industrial equipment and deliver significant annual economic value. The U.S. Air Force has deployed the C3 AI Readiness application on top of AWS’s services within a secure GovCloud environment to improve maintenance and uptime across 20 aircraft platforms. The San Mateo County Sheriff’s Office uses C3 AI Law Enforcement running on top of AWS to streamline investigations and integrate and unify five disparate databases. The history of technology is marked by before-and-after moments – advances that spurred new industries, enabled the transformation of others, changed how people interact with technology, and reshaped society. The public rollout of the Netscape web browser in 1994 was one such moment, the introduction of the Apple iPhone just 16 years ago another.

To say that artificial intelligence (AI) has dominated stock and technology talk would be a huge understatement. After the immediate success of OpenAI’s ChatGPT in November 2022, AI went mainstream and was quickly crowned as the Next Big Thing. But how would management turn a profit in by the fourth quarter of fiscal 2024 if it is already this far in the hole?

Video related applications

The company is also involved in other markets that could provide solid growth over the long term, including making chips for gaming, autonomous driving, and graphics development for metaverse applications. First, macro headwinds drove many companies to rein in their spending. Second, C3.ai switched from a subscription-based model to a usage-based one that only charges customers for the services they use. That change reduced its revenue and the stickiness of its ecosystem, but the company insists it was necessary to attract more customers in this challenging market.

Yakov Livshits
Founder of the DevEducation project
A prolific businessman and investor, and the founder of several large companies in Israel, the USA and the UAE, Yakov’s corporation comprises over 2,000 employees all over the world. He graduated from the University of Oxford in the UK and Technion in Israel, before moving on to study complex systems science at NECSI in the USA. Yakov has a Masters in Software Development.

Based on those simple facts, I believe C3.ai’s stock will likely underperform the market over the next 12 months. Generative AI will usher in a next wave of widespread adoption of AI in the enterprise. Every single customer experience and application will benefit from this technology. To best take advantage of these innovations, customers should turn to providers who have been developing transformational AI/ML solutions for years — C3 AI, running on AWS. C3 AI said its deployments deliver deterministic answers rather than random ones and that results can be immediately traced to the source. The LLM is firewalled from source data to minimize the risk of data exfiltration and LLM-caused cyberattacks.

All are available from the company or in the Google, AWS and Microsoft Azure marketplaces. C3.ai stock is still up over 144% year-to-date despite the recent decline in the price. However, analysts remain sidelined on C3.ai stock, and their average 12-month price target suggests a slight downside potential from current levels. Generative AI has also influenced the software development sector by automating manual coding. Rather than coding the software completely, the IT professionals now have the flexibility to quickly develop a solution by explaining the AI model about what they are looking for.

Businesses need to find ways to speed up data analysis, optimize resources, and make smarter forecasts, and that’s basically what C3.ai’s enterprise software provides. Nvidia is the top supplier of data center chips and systems, while C3.ai provides mission-critical software to help companies design applications that take advantage of AI technology. But which of these AI leaders is the better investment for long-term investors? C3.ai’s (AI -1.28%) stock price plunged 12% on Sept. 7 after the enterprise AI software company posted its latest earnings report. For the first quarter of fiscal 2024, which ended on July 31, its revenue rose 11% year over year to $72 million and surpassed analysts' estimates by $1 million.

In his ongoing analyses and video reports, Allen focuses on the platforms, applications, people and ideas that will mold our digital future. Kieron partners with technology start-ups and organizations that share his interests in science, social affairs, non-profit work, fashion and the arts. During the Q1 FY24 conference call, the company’s management said that its enterprise AI applications are gaining substantial traction. However, the company expects to deliver revenue in the range of $295 to $320 million in Fiscal 2024, reflecting a year-over-year growth of about 11-20%, which appears low given the stellar demand for AI. Moreover, C3.ai’s margins are expected to remain under pressure in the short run as the company increases investments in generative AI.

This accounting method, which does not follow generally accepted accounting principles, doesn’t add in stock-based compensation expenses, which accounted for $50.9 million of C3.ai’s expenses. One of the most attractive artificial intelligence (AI) investments in 2023 has been C3.ai (AI -1.22%). When someone searches online for "AI stocks," it’s often the first to come up, making it a natural entry point for many investors looking to gain exposure to this massive trend. With the stock up around 150% this year, it’s safe to say that it has benefited from this search optimization. UiPath is clearly outperforming C3.ai but the stock market actually has higher expectations for the latter. C3.ai shares are trading for 11.5 times trailing sales while UiPath is trading for just 9.2 times trailing sales.

When talking to enterprise customers, I invariably find that although Google Cloud is perhaps not the primary cloud provider, it is often utilized for its analytics and AI capabilities. As generative AI becomes more ubiquitous, Google can increase its market share. The generative AI opportunity could be Google Cloud’s big play to get to the next level of acceptance in the enterprise—and all the pieces of that puzzle seem to be falling into place. For long-term investors with long time horizons who can stomach the inevitable volatility that’ll come with investing in C3.ai, it’s not too late to invest. The better approach would be to determine how much you want to invest in the company and then dollar-cost average your way into a stake over time.

• C3.ai can grow much faster than it is right now, but Nvidia is clearly the stronger of the two.
• Its adjusted gross margin dropped from 79% in fiscal 2022 to 77% in fiscal 2023, then tumbled to 69% in the first quarter of fiscal 2024.
• Some fine-tuned models are used to understand specific industry domains, functional domains, or applications areas.
• The generative AI opportunity could be Google Cloud’s big play to get to the next level of acceptance in the enterprise—and all the pieces of that puzzle seem to be falling into place.
• In March, C3.ai released the C3 Generative AI service and it’s already reporting record demand.

It looks like the stock will remain under pressure following the release of the company’s latest earnings report. C3.ai released its fiscal 2024 first-quarter (ended July 31) results on Sept. 6, and investors were quick to press the panic button as the company now expects to post a bigger loss this year. The company was earlier forecasting an adjusted profit in the fourth quarter of the fiscal year, but it doesn’t expect to hit that target anymore, instead planning to invest more money in generative AI offerings. C3.ai’s (AI -1.17%) stock market rally has come to a screeching halt after a terrific start to the year. Shares of the artificial intelligence (AI) software provider have pulled back 41% in the past three months.

It narrowed its adjusted net loss from $13 million to $11 million, or $0.09 per share, which exceeded the consensus forecast by $0.08 per share. "We enjoy a robust partnership with AWS, its strength demonstrated by the large number and success of our mutual customers," said C3 AI CEO Thomas M. Siebel. Even though there has been a sharp pullback in C3.ai’s stock price of late, it remains richly valued at 11.2 times sales. Its top-line growth isn’t nearly strong enough to justify that multiple. The company’s full-year fiscal 2024 guidance for $295 million to $320 million of revenue would mark 15% growth (at the midpoint) and a nice improvement from the 5.6% growth in fiscal 2023. But the slowdown in deal-making activity seen last quarter could keep the company from hitting its targets.