Entering text into the input field will update the search result below

C3.ai - Getting Smarter, Not Smart Enough

Apr. 12, 2021 4:13 AM ETC3.ai, Inc. (AI)35 Comments


  • C3.ai has been one of the most hyped IPOs late in 2020.
  • Despite the AI promise, the actual growth results appear underwhelming, even as the company has quite a few high profile clients.
  • Slower growth and steep losses are key concerns amidst still a very steep valuation after shares have already lost two-thirds from the top.
  • Looking for a helping hand in the market? Members of Value In Corporate Events get exclusive ideas and guidance to navigate any climate. Learn More »

Digital Intelligence digitaal concept
Photo by Olemedia/E+ via Getty Images

When C3.ai (NYSE:AI) went public in December 2020 I wondered if this artificial intelligence play was an intelligent investment as well. This came after shares tripled from the offer price, as I developed a cautious stance

If you like to see more ideas, please subscribe to the premium service "Value in Corporate Events" here and try the free trial. In this service we cover major earnings events, M&A, IPOs and other significant corporate events with actionable ideas. Furthermore, we provide coverage of situations and names on request!

This article was written by

The Value Investor profile picture

The Value Investor has a Master of Science with specialization in financial markets and a decade of experience tracking companies via catalytic company events.

As the leader of the investing group Value In Corporate Events they provide members with opportunities to capitalize on IPOs, mergers & acquisitions, earnings reports and changes in corporate capital allocation. Coverage includes 10 major events a month with an eye towards finding the best opportunities. Learn more.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

Comments (35)

Pete Palmer profile picture
What's C3ai's marketing budget? I'm constantly seeing their commercials on the cable business channels.
I regretted chasing this stock. Down -40%. Industry vertical partnerships to sell its solutions to other enterprises is a great way to drive sector network effect. Just wondering if PLTR could eventually disrupt its AI solutions since PLTR is planning to give companies free trial, and has according to some, the best visualizations. I own both PLTR, AI.
Guraaf profile picture
@Newbie5009 Sell now. It is headed below $30. Get out now.
@Guraaf I saw your bio. I guess you've seen this before. Where would you think I should put my proceeds from sale of AI into, for long term growth?
@Guraaf I'm still new to investing
What on earth does this software do that Azure, AWS, Google and IBM Watson doesn't already do??? Stick AI in their name and expect magic?? NOT!
we just saw nuance purchased by MSFT! What are the odds such promising technology gets purchased by a major entrenched Tech company?
@artster Close to zero. This company is hyping their AI algorithm. Siebel has nothing out the ordinary in terms his IP algorithm. If you believe in the growth of AI, buy NVDA, Palantir, Microsoft, Amazon and Google. Not this company.
Der Boersenhobbyist profile picture
For companies like C3.AI or affirm, I look at the original, "fair" IPO value as guidance for a good entry point. Here is was $31-$34. Including the growth and progress the company has made since, an good entry would be around $40, only judging by these metrics. You can find these in earlier IPO news here on SA easily.
Guraaf profile picture
@Der Boersenhobbyist IPO is never fair. It is a sellers market and not a buyers market.
@Guraaf I agree, a truly fair price would probably be 1/2-2/3 of IPO price
Der Boersenhobbyist profile picture
@Guraaf Well, I am 100% with you. I remember for SNOW, CNBC saying that pre-IPO, most investors got in for $5-6 (and, no, I am not missing "0"). So, if you define "fair" like that, then it'll never be fair.
Another fun fact that came out when I listened to the GME hearing: The expert lady that was involved (sorry forgot her name) said that if you want to invest pre-IPO, you'd have to make 200k+ annually OR have $1 million+ (If I recall that correctly). I was stunned that no one even cared and everyone is talking about how nice SPACs are that retail Investors can participate as early as anyone else. But who am I to critizise that system when no one seems to care...
Don't touch it anywhere >$40.
rodolfoavalos1 profile picture
This company is as overvalued as the Hydrogen plays.. bright future but still a looong way for it to be fully realized. Might start to buy shares under $45, and that's giving them the benefit of the doubt.
Guraaf profile picture
@rodolfoavalos1 $45 will still be over-priced. Perhaps $20 level is a better entry point.
over priced by a mile until below at least 40! maybe the fair value should be set even lower.
@jeffk100 Management is terribly disingenuous with their technology and customer claims!!
@jeffk100 Insider stock lockup ends in June! Do not touch until July! Huge down side risk. The management insiders and VCs will be selling their shares like panicked thieves.
At $6B market cap, you get a chance to own a large company that is still building out the foundation.

This company appears overly, ridiculously, outrageously expensive but the current numbers do not reflect the future. Look at the management, the board, the way they are building sales capacity. They are laying a large scale foundation for a large scale company.

Of course, it's a wild bet on management.
Guraaf profile picture
@Sumbody1toldme What was the management doing for last 10+ years? Asleep at the wheel and now trying to cash in during the wild tech run of COVID-19.
@Guraaf what a worthless comment. Sorry I wasted time following the notification from SA. Wildy mis-informed and obviously you have put no thought into this. Good luck having your dividends outpace inflation.
Guraaf profile picture
@Sumbody1toldme Hopefully you will see what the company means and sell now before you lose more money.
brityieldstudent profile picture
I never understood their sales ambassador approach. They say that their leading clients act as sales promoters within their industry.....how does that work? If I'm a client of C3 and I find that their product really improves my business, am I then going to rush out to my competition and try to get them to use it? I think not.
@brityieldstudent - perhaps the competition would see the value C3 products adds to clients and thus buy into it. Many companies showcase client success stories as part of their marketing.
@brityieldstudent I think it's probably more of a trickle down approach. Contractor to subcontractor or contractor to client. Baker Hughes would not be reaching out to Schlumberger or Haliburton but rather either its drilling/fracking partners or more likely its E&P clients which is probably just about every E&P company under the sun.
brityieldstudent profile picture

Good points, I had only considered a lateral approach, vertically it makes much more sense!
Any substantial drops below $60 and I'll be adding more dshrs to my count. Future long-term investment, as patience will be rewarded once revenues / growth are realized. The same for my other AI holdings in $PLTR and $FSLY. Will be adding more shrs of these on any nice pullbacks in pps also.
grxbstrd profile picture
"long-term investment"

This is the right way to look at this stock.
@Novavax Op Warp SpeedYou sir will be granted your wish shortly!
Disagree with this article? Submit your own. To report a factual error in this article, . Your feedback matters to us!

About AI

SymbolLast Price% Chg
Market Cap
Yield (TTM)
Rev Growth (YoY)
Short Interest
Prev. Close
Compare to Peers

More on AI

Related Stocks

SymbolLast Price% Chg
To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.