AI stocks surge as investors bet on growth prospects (updated)

Guardforce AI

03/03/2023 14:47

(Updates prices to open; adds details, comments)
       March 3 (Reuters) - Shares of artificial
intelligence-based (AI) product makers zoomed on Friday, as a
strong forecast from retail darling C3.ai Inc  AI.N  amplified
an ongoing euphoria in the segment driven by the launch of
OpenAI's ChatGPT.
    C3.a1 forecast better-than-expected revenue and profit for
both the fourth quarter and fiscal year 2023, after its
third-quarter results topped Wall Street estimates.
    Shares of the AI software provider were up 16% at $24.80,
and were one of the top five trending stocks on StockTwits. If
the gains hold, the stock is set to notch its strongest one-day
gain in a month.
    "The company is starting to gain momentum in building
significant enterprise opportunities in its pipeline with its
suite of innovative enterprise AI solutions," said Wedbush
analyst Daniel Ives.
    The firm's aim to turn cash positive and adjusted profitable
by the end of fiscal year 2024 also boosted the stock, but Ives
believes the execution of these ambitions is key to regain the
Street's confidence heading into 2023. 
    Retail investors have flocked to small-cap firms building AI
tools as companies such as Google-parent Alphabet Inc  AAPL.O 
and Microsoft Corp  MSFT.O  have locked horns to make AI the
next big growth driver.
    Microsoft's investment in OpenAI's ChatGPT boosted AI firms'
popularity further. Chatbots like the ChatGPT are software
applications that aim to mimic human conversation using
artificial intelligence.
    Other major AI stocks also surged on Friday with BigBear.ai
 BBAI.N , conversation intelligence firm SoundHound AI  SOUN.O ,
and Thailand's security firm Guardforce AI  GFAI.O  jumping
between 5% and 20%.
    So far this year, these stocks, including C3.ai, have surged
33.9%-321.6%, as of the previous day's close. 
    "AI could become the new gold rush on Wall Street," said
Adam Sarhan, chief executive officer of 50 Park Investments in
Florida.
        "But it still needs some more time to mature a bit,
better price action, and prove that it can generate profits for
investors." 

 (Reporting by Ankika Biswas in Bengaluru; editing by Uttaresh
Venkateshwaran)
 ((Ankika.Biswas@thomsonreuters.com))