C3.ai (AI) has been a top 2023 performer in Roundhill Generative AI ETF (CHAT). In terms of percentage gains, it came first with a gain of nearly 200% this year.
On Thursday, the enterprise AI play told its investor day attendees that it’s seen strong activity in several pilot runs with customers during the current quarter. Is AI stock a buy now?
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On May 31, C3.ai reported sales of $72.4 million in the fiscal fourth quarter — in line with the higher end of its preliminary sales numbers. Sales growth was flat year over year.
Subscription revenue was 79% of sales, or $56.9 million. The company saw a loss of 13 cents per share, compared with a 21-cent loss a year ago. Free cash flow from business operations was $16.3 million during the quarter.
Shares broke out of a consolidation in March but almost immediately pulled back and slid below the 50-day moving average in April. The stock surged 33% ahead of earnings, reported on May 30. C3.ai then formed a cup base and is extended from the 34.68 buy point. The stock has reached its 20% profit target from that entry.
AI Stock Rises On Oracle’s Outlook
Shares of C3.ai rose after Oracle (ORCL) saw fiscal fourth-quarter sales surge on demand for cloud computing to meet generative AI demand. The enterprise software giant has invested in generative AI startup Cohere to take on competitors such as Amazon.com (AMZN). The company expects AI workload to continue to drive demand for cloud infrastructure.
For the fiscal year that also ended April 30, C3.ai had sales of $266.8 million, above earlier views of $264 million-$266 million.
The enterprise AI provider expects sustainable profitability by the end of fiscal 2024. Analysts polled by FactSet expect 19% sales growth for the year.
In May, C3.ai partnered with Google Cloud Marketplace and Amazon Marketplace.
AI Stock: Different Consumption Model
In December, AI stock changed its pricing model from subscription to consumption-based pricing.
The move brought the company in line with industry standards for software-as-a-service providers. The practice is common across…
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