C3.ai (AI) broke out of consolidation with a 31.02 entry on Friday.
On Wednesday, Tesla (TSLA) chief Elon Musk and Apple (AAPL) co-founder Steve Wozniak asked for a six-month pause on AI training on systems using more advanced technology than GPT-4. GPT-4 has the ability to use both text and images.
Over 1000 tech leaders at OpenAI and Google parent Alphabet (GOOGL) and its subsidiary DeepMind joined in signing.
In a letter published by the Future of Life Coalition, the group asked for “safety protocols” robust governance and oversight.
According to the executive director at University of California Berkeley’s Center for Human-Compatible AI, Mark Nitzberg, “remaining in control of systems that are very powerful, maybe more powerful than we are” is the concern.
AI shares broke out on Friday. Shares also boast a relative strength line that is at a 52-week high.
Artificial Intelligence Projected Market
C3.ai CEO Tom Siebel sees AI applications hitting $600 billion as everyone will eventually use enterprise AI.
That is far less than Cathie Wood’s prediction. In Ark Investment Management’s “Big Ideas 2023” report, Wood sees AI adding $200 trillion to the economy by 2030.
Generative AI will increase efficiency for professionals and AI stock has first mover advantage.
AI Stock Earnings: Still In The Red
For the quarter ended January, AI stock reported sales of $66.4 million, down 4% from the $69.8 million posted a year ago but above the company’s guidance of $ 63 million-$65 million for the quarter. AI also posted a net loss per share of 6 cents, which was slightly better than the 7 cents per share loss a year ago.
CEO Thomas Siebel stated that “overall business sentiment appears to be improving” compared with mid-2022 and he sees the company becoming profitable in fiscal 2024.
The generative AI stock disclosed $789.8 million in cash to take it through “equity market turbulence” and help it “invest in growth through enterprise AI innovation and sales expansion.”
AI has also expanded ties with Amazon.com’s Amazon Web Services for several industries, including local government offices. AI stock was up 4% Tuesday after the news.
AI Stock’s Surge On ChatGPT Success
AI stock initially skyrocketed in February.
Users successfully started using OpenAI’s artificial intelligence app, ChatGPT, to generate answers, texts, emails and even books. AI stock stands to benefit from applications like ChatGPT.
C3.ai provides enterprise AI, which comprise applications for businesses but not consumers. But the company stands to benefit from consumer apps like ChatGPT because the code can be integrated into the C3.ai platform.
The ChatGPT app reached 100 million monthly active users in two months, beating popular apps like Tik-Tok and Instagram. OpenAI’s project with Microsoft (MSFT), ChatGPT uses natural language to helps users write emails, develop codes and finds answers for daily questions.
C3.ai makes AI-enabled software applications that can be configured for different purposes. The software can make networks more reliable, detecting fraud, balancing inventory and demand, solving supply chain issues, increasing energy efficiency, helping with anti-money laundering and customer interfacing.
C3.ai products are also valuable adds to enterprise CRM systems where automation can reduce cost and errors.
AI Stock IPO
AI stock popped on the first day of public listing in December 2020, opening at 42 per share.
The stock rose from 11.19 at the end of 2022 to 30.92 earlier this month, surging over 150% in less than two months. The Composite Rating of 88 is rising, yet still falls below the desirable level of 90. The low 45 EPS Rating clearly weighs on the Composite Rating. However, the 99 Relative Strength Rating speaks for itself, highlighting outperformance compared with other stocks in the IBD database.
The stock also boasts a “A-” Accumulation/Distribution Rating, even though mutual funds own only 35% of shares, according to IBD MarketSmith.
According to the CAN SLIM investment strategy, stocks with strong records of sales and earnings growth that offer clear buy points from bases are sound picks. AI stock has broken out of a base on the news. Its earnings remain on watch.
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