2 Falling AI Stocks That Can Soar by Over 40%, According to Wall Street

Are you looking for artificial intelligence (AI) stocks that could be good buys amid the stock market’s recent pullback? If you’re willing to take on some risk, there are some beaten-down stocks that may generate some good returns, at least, according to Wall Street.

Based on analyst price targets, C3.ai (NYSE: AI) and Bigbear.ai (NYSE: BBAI) could both generate 40% returns or better in the near future. Here’s a closer look at these stocks and what would need to happen for them to rally.

1. C3.ai

Shares of C3.ai have plunged 25% thus far in 2024. This comes after a much stronger rally in 2023, when the stock surged 157% amid the hype in AI.

C3.ai just hasn’t been generating the types of growth investors may have expected from an AI stock. While chipmaker Nvidia has been tripling its sales numbers, C3.ai’s revenue grew by a much more modest rate of 18% last quarter, for the period ending Jan. 31. And revenue of $78.4 million for the period was up just 7% on a quarter-over-quarter basis from the previous period.

The company, however, remains optimistic. C3.ai provides businesses with AI services to help them improve their throughput and efficiency. In its latest earnings release, the company highlighted a 71% increase in the number of new pilots launched (29) compared to the previous year. And the number of agreements it closed (50) was also 85% higher than a year ago.

If all those deals and pilots pay off, there could be a big payoff for the stock. According to Wall Street’s consensus analyst price target of just under $30, shares of C3.ai could rise by around 40% from where they are right now.

Investors, however, would need a reason to rally, and a much higher revenue growth rate could do that. And given its uninspiring results thus far and the company’s continued lack of profitability, C3.ai isn’t a stock I’d take a chance on today. While the opportunities sound good, investors may be better off waiting to see that the results are there to actually back up the hype and excitement.