C3.ai (AI) rose after the company responded to an allegation that the enterprise software play had “serious accounting and disclosure issues.” Shares had broken out of consolidation with a 31.02 entry last week but fell steeply by 26% on Tuesday and Wednesday.
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Earlier, short seller Kerrisdale Capital raised questions about AI stock’s unbilled receivables and margins from client Baker Hughes.
However, the company alleges unbilled receivables are consistent with the accounting practice of recognizing revenue in the current quarter, even if some revenue is booked in a later quarter. It also stated the reference to gross margins in the Baker Hughes contract isn’t supported by financial statements that do not provide “customer-specific” information.
Though shares have not undercut their base, the fall below the 50-day moving average is a sell signal and AI stock is testing key levels and is on watch.
Massive Artificial Intelligence Growth
C3.ai CEO Tom Siebel sees AI applications hitting $600 billion as everyone will eventually use enterprise AI.
That is far less than Cathie Wood’s prediction. In Ark Investment Management’s “Big Ideas 2023” report, Wood sees AI adding $200 trillion to the economy by 2030.
Generative AI will increase efficiency for professionals and AI stock has first-mover advantage, touting partnerships with Google parent Alphabet (GOOGL), Amazon (AMZN), Microsoft (MSFT), Accenture (ACN), Baker Hughes (BKR) and others.
AI Stock Earnings: Still In The Red
AI stock reported sales of $66.7 million in the last quarter, down 4% year over year from $69.8 million. However, it still beat guidance of $63-$65 million. AI posted a net loss per share of 6 cents, slightly better than the 7 cents per share loss last year.
CEO Thomas Siebel stated that “overall business sentiment appears to be improving” compared with mid-2022 and he sees the company becoming profitable in fiscal 2024.
The generative AI stock disclosed $789.8 million in cash to carry it through “equity market turbulence”. This should help “invest in growth through enterprise AI…
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