C3.ai (AI) rose on Monday, breaking a five-day losing streak. Shares edged higher on Tuesday. Is AI stock a buy now?
Shares are gaining after they fell 7% below a buy point of 27.78 and triggered a key sell signal. The stock has also undercut its 50-day moving average.
News that Chairman and Chief Executive Officer Thomas Siebel will be stepping down as CEO due to health reasons pressured the stock in late July. Siebel plans on continuing as Executive Chairman at C3.ai.
Shares rose in late June after C3.ai said an Oracle (ORCL) senior executive, Rob Schilling, had joined the enterprise software company as its Chief Commercial Officer. Schilling has led sales at several software companies, including Siebel Systems, which was acquired by Oracle in 2006.
The company also in June said its services were listed on Amazon's (AWS) Amazon Web Services U.S. Intelligence Community program. The U.S. Intelligence Community is an AWS digital catalog of software products from vendors that specialize in supporting government customers.
Shares gapped up on fourth-quarter results on May 29. But the victory was short-lived, and shares fell.
Sales grew 26% to $108.7 million, beating views of $107.8 million, while a loss of 16 cents per share was better than analyst estimates of a loss of 20 cents per share.
Shares dropped 5% on Jan. 27 after news that China's DeepSeek's artificial intelligence model costs just a fraction of its U.S. counterparts. That triggered a sell-off in AI stocks.
But the stock reversed higher the next day amid news that the enterprise AI software maker had won an "awardable" status as a vendor for the Department of Defense's Tradewinds Marketplace – the Pentagon's framework for sourcing, funding, and developing solutions to challenges that emerge from artificial intelligence and machine learning applications.
Find Stocks To Watch: From Top IPOs To Large And Small Caps
On his second day in office, President Donald Trump revoked a rule that required AI developers to declare the results of their safety tests to the government before making them public. While that may not have a direct bearing on C3.ai, the pro-AI move lifted the stock.
Shares also rose after Trump announced Stargate, a $500 billion plan to build AI infrastructure.
Earlier, the outgoing Biden administration released last-minute regulations in January that would impose huge restrictions on artificial intelligence chip exports. Ken Glueck, executive vice president at software database leader Oracle (ORCL), noted that the restrictions "will turn the U.S. cloud industry upside down" and reduce the global chip market by 80% for U.S. chipmakers. AI stock fell 4.5% that day.
But those restrictions were rescinded by Trump.
In November, shares rose after Goldman Sachs' 2025 forecast pointed to what it calls a Phase 3 shift in the AI revolution in which software and services companies generate revenue from AI applications. These offered investors longer-lasting growth and relied less on economic expansion or interest rates, Goldman said. Earlier phases focused on AI infrastructure.
On Dec. 18, shares fell amid Siebel's warning about an AI bubble. Shares fell 7% and headed even lower the next day after an analyst downgrade, falling 10%.
Siebel noted in an interview on CNBC that markets were over-evaluating the AI technologies. "There is a bubble. When there are technological breakthroughs, the market tends to overvalue them," he said. He added that "it will correct at some point."
Meanwhile, KeyBanc Capital Markets analyst Eric Heath downgraded the stock to underweight from sector weight Dec. 19. He cited concerns about subscription revenue growth and revenue estimates that may be too high. The stock sold off 10.7% that day.
On Nov. 19, the AI play announced that Microsoft (MSFT) will extend its partnership and provide cloud computing services through Azure to the artificial intelligence company. AI stock soared 24.2%, it best day since May 30, 2023, when it rocketed 33.4%, according to Dow Jones Market Data.
Microsoft and C3.ai entered into a partnership in 2018 to provide enterprise AI services to several companies.
C3.ai has a Relative Strength Rating of 25. Investor's Business Daily recommends focusing on stocks with an RS Rating of 80 or above.
Its November rally helped the stock outperform the S&P 500. The stock had soared 51%, well above the S&P 500's 6% monthly gain. But in December, shares dropped 7% while the S&P 500 fell 2.5%.
In 2024, AI stock gained 20% compared with the S&P 500's return of 23%.
Shares also underperformed the benchmark index in January, falling 9% while the S&P rose 2.7%. In February, C3.ai stock plunged 25% vs. the S&P 500's 1.4% loss. The S&P 500 fell 6% in March vs. AI stock's 10% loss. In April, AI stock gained 4.6% while the index fell 0.8%.
In May, C3.ai outperformed with a 21% gain vs. the S&P 500 which rose 6%.
In June, AI stock fell 8% while the S&P 500 gained 5%.
In July, C3.ai fell 4% while the benchmark index rose 2%.
How To Read Stock Charts
Industry trends have worked in C3.ai's favor. The stock skyrocketed Feb. 1, 2023, when users successfully tapped OpenAI's ChatGPT artificial intelligence app to generate answers, texts, emails and even write books.
The ChatGPT app reached 100 million monthly active users in two months, beating popular apps like TikTok and Instagram. OpenAI's app uses natural language to help users write emails, write code and find answers to daily questions.
There are other considerations. In December 2022, C3.ai changed its pricing model from subscription to consumption-based pricing.
The move brought the company in line with industry standards for software-as-a-service providers. The practice is common across Amazon.com's Amazon Web Services, Alphabet's (GOOGL) Google Cloud and Microsoft's Azure, as well as smaller players.
Consumption pricing works like a utility bill. That is, the higher the consumption, the pricier the service. Since AI customers will benefit from having access to an AI enterprise platform with unlimited use and developer licenses, the switch to consumption pricing could drive revenue growth, but not immediately.
C3.ai CEO Siebel indicated the consumption-pricing model will also lower barriers to entry because companies do not have to be tied to long contracts.
Artificial Intelligence News And AI Stocks To Watch
Software from the Redwood City, Calif.-based company can make networks more reliable by detecting fraud, balancing inventory and demand, solving supply-chain issues and increasing energy efficiency. It can also help defend against money laundering.
The enterprise software stock popped on its first day of trading, Dec. 9, 2020. Shares leaped from their initial public offering price of 42 to finish at 92.49 that day.
C3.ai stock is prone to drastic swings. On Nov. 20, 2023, C3.ai stock jumped more than 5% but reversed lower to close with a 4.3% loss when Sam Altman was ousted as chief executive from another artificial intelligence specialist, OpenAI.
Altman quickly returned to OpenAI, but the news apparently triggered speculative trading as the market continued to search for leaders in the space.
C3.ai stock holds a Composite Rating of 16 while its Earnings Per Share Rating also lags at 15 due to the company's losses. AI stock lags in its industry group, according to IBD Stock Checkup.
Meanwhile, the Accumulation/Distribution Rating is D+ on a scale of A to E. The rating indicates that funds have been selling the stock in the recent 13 weeks.
The stock recently triggered a sell rule and fell below the 50-day moving average – another sell signal. C3.ai's technical ratings are also well below recommended levels and indicate poor price action in recent weeks.
To find the best stocks, check out IBD Stock Lists and IBD Data Tables.
Please follow VRamakrishnan on X/Twitter for more news on the stock market today.
YOU MAY ALSO LIKE:
Is Nvidia A Buy?
MarketSurge: Research, Charts, Data And Coaching All In One Place
The Four Pillars Of The IBD Methodology
Risk Management In The Stock Market: How Much Money To Invest
IBD Live: Learn And Analyze Growth Stocks With The Pros
免責聲明：投資有風險，本文並非投資建議，以上內容不應被視為任何金融產品的購買或出售要約、建議或邀請，作者或其他用戶的任何相關討論、評論或帖子也不應被視為此類內容。本文僅供一般參考，不考慮您的個人投資目標、財務狀況或需求。TTM對信息的準確性和完整性不承擔任何責任或保證，投資者應自行研究並在投資前尋求專業建議。