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C3.ai, Inc.: Not Spectacular Enough (Rating Downgrade)

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Update - Nov. 20 

C3.ai still doesn't appear to be riding the AI wave. Job cuts are an opportunity to improve efficiency, but this company should have the growth to make job cuts unnecessary. 

  • C3.ai (NYSE:AI) shares erased earlier gains and fell nearly 6% on Monday amid a report that the enterprise software company is cutting jobs.
  • The job cuts, which happened across multiple departments, happened due in part to employee performance and cost savings, Bloomberg reported.

Finviz Chart

Original article posted on Sept. 7  

  • C3.ai, Inc. stock is falling after the company announced plans to invest more in branding their AI software, prolonging ongoing losses.
  • The company has a large cash balance and positive operating cash flows, but the market is unlikely to reward investments without corresponding revenue growth.
  • The stock is expensive with no appeal until the EV/FY24 sales multiple dips closer to 5x due to the limited growth.
The enterprise artificial intelligence ("AI") software business continues to struggle to gain momentum based on the fiscal Q1 results from C3.ai, Inc. (NYSE:AI), unlike AI GPU chips. The stock is falling in after-hours due to the company forecasting investing more in the business and prolonging ongoing losses. My investment thesis is Bearish on the stock due to the company needing to boost investing in AI in order to generate superior growth.

Read the full article on Seeking Alpha. 

Disclosure: No position mentioned. Please review the disclaimer page for more details. 

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