Share prices of C3.ai (NYSE: AI) were surging after the company’s quarterly business update on Wednesday. The report highlighted the booming demand for enterprise artificial intelligence (AI) software. The company’s revenue beat the Wall Street consensus estimate, and one firm sees more upside for the stock.
Wedbush Securities analysts kept an outperforming rating on the stock and raised their price goal from $35 to $40, representing about 10% upside from the current share price. The price goal by itself shouldn’t matter to an investor who’s looking out for much larger gains over the long term. On this case, Wedbush noted the quarter validated its confidence within the expansion story, which is a vital signpost for any investor.
Why C3.ai stock is up
C3.ai reported a revenue increase of 18% 12 months over 12 months, a slight acceleration over the 17% increase throughout the previous quarter. On the earnings call, C3.ai CEO Thomas Siebel emphasized that data centers are investing in AI for greater than consumer applications, stating, “The market interest in enterprise AI is staggering.”
The strong demand explains Wedbush’s confidence within the expansion story that will gain advantage the stock throughout the near term. The company signed several latest agreements with major firms, including T-Mobile and Boston Scientific, and continued to see strong growth from the U.S. government.
The negative with C3.ai is that it continues to report large losses on the underside line, but the company’s profitability should improve since the business continues to grow. The company noted a 73% year-over-year increase in the consumer pipeline.
Management is on the lookout for full-year fiscal 2024 revenue to increase roughly 15% over fiscal 2023, while it expects free money flow to point out positive in fiscal 2025.
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John Ballard has positions in C3.ai. The Motley Idiot recommends C3.ai and T-Mobile US. The Motley Idiot has a disclosure policy.
C3.ai Stock Is Headed to $40, In accordance with This Wall Street Analyst was originally published by The Motley Idiot