Retail investors' AI bet C3.ai climbs on strong results, forecast (updated)

Guardforce AI

29/02/2024 15:06

(Updates shares in paragraphs 1, 2, 7, 11)
       Feb 29 (Reuters) - C3.ai shares  AI.N  jumped 24% to a
six-month high on Thursday after the AI software firm delivered
third-quarter results ahead of Wall Street expectations and
narrowed its full-year revenue forecast on strong enterprise
demand.
    The company's shares have gained 227% since the end of 2022,
valuing it at $4.46 billion, as it draws strong interest from
retail investors looking to bet on the boom in artificial
intelligence (AI).
    However, Nvidia  NVDA.O , the poster child for AI, has
rocketed 445% in market value during the same period.
    Strong demand from federal customers helped C3.ai's
subscription revenue increase 23% in the reported quarter to
$70.4 million and beat estimate of $66.77 million, according to
LSEG data. Subscriptions generate about 90% of total revenue.
    "The company is having notable success in the federal sector
while signing more multi-year subscription agreements that trend
similarly to consumption revenue behavior," said D.A. Davidson
analyst Gil Luria.
    Other AI-related stocks including BigBear.ai Holdings
 BBAI.N , Guardforce AI  GFAI.O , Arm Holdings  ARM.O  and
Nvidia  NVDA.O  gained between 2.5% and 10%, with SoundHound AI
 SOUN.O  climbing 9% ahead of its fourth-quarter results due
after markets close. 
    C3.ai's stock was last trading at $37, above the $30 median
price target of the 14 brokerages covering C3.ai. Their average
rating, according to LSEG data, is "hold". 
    Shares of the software company were among the top trending
tickers on retail trader forum Stocktwits.
    Redwood City, California-based C3.ai also narrowed its 2024
revenue forecast to $306-$310 million, from $295-$320 million.
    Still, the new forecast was largely above analysts'
estimates of $306.1 million.
    The company also said Chief Accounting Officer Hitesh Lath
will transition to the chief financial officer role, effective
March 1, replacing Juho Parkkinen.
    Parkkinen will remain as vice president of finance, C3.ai
said.
    

 (Reporting by Medha Singh and Ankika Biswas in Bengaluru;
Editing by Savio D'Souza and Sriraj Kalluvila)
 ((Medha.Singh@thomsonreuters.com; +91 80 6210 0592; X, formerly
Twitter: @medhasinghs;))