Investing

A Once-in-a-Generation Investment: 1 AI Stock You Don't Want to Miss Out On

Trey Thoelcke

Published: May 4, 2024 8:15 am

Investing in artificial intelligence (AI) may seem to come down to shelling out hundreds of dollars a share for big tech stocks or trying to choose from the many AI startups that are popping up like mushrooms. Where can investors find a genuine AI stock that won’t break the bank but will still be around at the end of the decade? An AI stock with good prospects that investors would regret not investing in when they had a chance? C3.ai Inc. (NYSE: AI) could just be one of those stocks.

Why Invest in AI?

Top AI stocks like Nvidia Corp. (NASDAQ: NVDA) have soared to record highs. Is it too late to initiate or bolster a stake now? Even if AI seems like it’s everywhere now, we are in fact in the early stages of AI adoption. The market size is expected to show an annual growth rate of more than 25% to over $826 billion by 2030, or $1.8 trillion by some estimates. So, there is significant long-term upside in the industry.

Another good sign that AI is not just a fad is that Warren Buffett, known for investing in businesses that are easy to understand, has stakes in AI stocks.

Prospects for C3 AI

C3 AI operates as a global enterprise AI software company. Its offerings include:

• C3 AI platform, an application development and runtime environment that enables customers to design, develop, and deploy enterprise AI applications
• C3 AI Ex Machina for analysis-ready data
• C3 AI CRM, an industry-specific customer relationship management solution
• C3 Generative AI Product Suite, which enables users to locate, retrieve, and present information

It also offers these applications:

• C3 AI Inventory Optimization, a solution to optimize raw material, in-process, and finished goods inventory levels
• C3 AI Supply Network Risk, which identifies emerging inbound and outbound risks across the network
• C3 AI Sustainability Suite, which helps to decrease greenhouse gas emission
• C3 AI Production Schedule Optimization, a solution for scheduling production
• C3 AI Financial Services Suite, which helps to minimize compliance risks
• C3 AI Energy Management solution

In addition, the company offers integrated turnkey enterprise AI applications for oil and gas, chemicals, utilities, manufacturing, financial services, defense, intelligence, aerospace, health care, and telecommunications markets. It has strategic partnerships with Amazon Web Services, Baker Hughes, Booz Allen, Google, Microsoft, and Raytheon.

The company was founded in 2009 by billionaire tech entrepreneur Thomas Siebel. It went public in 2020 and is headquartered in Silicon Valley. The company’s original aim was to help manage corporate carbon footprints. Today, similar companies include Palantir Technologies Inc. (NYSE: PLTR) and Snowflake Inc. (NYSE: SNOW). The biggest AI companies are Magnificent Seven members Alphabet Inc. (NASDAQ: GOOGL), Microsoft Corp. (NASDAQ: MSFT), and Nvidia.

Like those Magnificent Seven members of the industry, C3 AI is benefiting from the $8 trillion surge in AI investing. The Financial Times recognized it as one of America’s fastest-growing companies of 2024. The company launched the standard edition of C3 Generative AI on Google Cloud Marketplace in March, and in February it named a new chief financial officer as it posted robust quarterly results.

C3 AI Stock

The share price is more than 25% higher than a year ago. That is about the same gain as the Nasdaq. The stock jumped briefly after the quarterly report but was last seen down 22% or so year to date. The 52-week trading range is $16.79 to $48.87. The consensus price target is up at $29.73. That indicates that analysts anticipate over 32% further upside in the next 52 weeks. Oddly, less than half of eight analysts who cover the stock recommend buying shares. Yet, USA Today considers it as one of the most promising AI stocks of 2024.

Many AI exchange-traded funds include C3 AI among their holdings. Check out the 20 absolutely best AI ETFs to buy.

Top C3 AI shareholders include CEO Thomas Siebel, Vanguard, Blackrock, and Morgan Stanley. Note that three executives sold small batches of shares back in December. In addition, more than 31% of the float is shorted. Siebel had a few thoughts about the short sellers after the most recent quarterly report.

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