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C3.ai Is A Bet Worth Taking

May 02, 2021 9:13 AM ETC3.ai, Inc. (AI)ADBE, BKR, FIS, IBM, MSFT, PLTR, RTX66 Comments
Zen Analyst profile picture
Zen Analyst


  • C3.ai is a leading AI company with many competitive advantages.
  • The market, though early, is massive with almost an unlimited potential for growth.
  • Valuation is more reasonable after the sell-off.

Abbreviation is Artificial Intelligence on a digital globe background. Machine learning concept. 3D Rendering
Photo by Igor Kutyaev/iStock via Getty Images

C3 Introduction

C3.ai, Inc. (NYSE:AI) went through one heck of a ride since its December 2020 IPO. The offering was priced at $42, opened for trading at $100 per share and closed at $92.49. It then quickly

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Zen Analyst profile picture
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Comments (66)

saysurf profile picture
Your conclusion is based on too much faith. Just because it was valued 80 times earlier but now 23 times looks reasonable valued ? Why do call it as "the leader in an emerging market with almost unlimited potential" ? Do you have any references which indicates its a leader in that space ?
Cambridge STR profile picture
@saysurf and it's valuation peaked in early Feb when nearly all heavily shorted stocks spiked.
Rcristi profile picture
why is that so diff.??? (to replicate its success)..all you have to do is hire 1000 proper men and have them work for u for 1 year
jrpspamm profile picture
your point about PLTR needing to host customer data in house is a good one. I know 1 company in particular that said no thanks on that basis. Any company that has PII or other sensitive data is going to be nervous about letting their data leave their premises. Secondly, while it is nice to see C3's wins, more interesting would be to see what companies they courted but lost. The biggest issue w/ AI for me (30 year software eng) is the ratio of hype to reality that permeates anything labeled AI. How much custom work is needed per client to get useful results? What is even the % of win/losses? What about the concentration in energy customers? Does that suggest a versatile product or a niche one? Thanks for the article. I have small long on PLTR and will continue to follow both of these, but I won't be at all surprised if GOOG one day obsoletes them both overnight
@jrpspamm Or maybe google can buyout c3 :)
hotplate1031 profile picture
What has been a negative for c3.AI should be it’s strength going forward. Exposure to energy and aerospace should be leverage for this company as the economy reopens. OIH is ripping topside and reflects Energy sector cap-ex. These companies are going to ramp up spending and that should equal c3 revising higher for FY21... and remember the bar is very very low right now.
lol...this is one is right there at the top of my worst investments. Lost big and now holding few shares
Zen Analyst profile picture
@jk0521 On the bright side, you can harvest the losses to off set the MAD GAINZ from GME. HODL.
Pltr has been dating a lot but no ring in the finger in the commercial space. Now they are giving their products away for free. Most businesses don't have Uncle Sam's deep pockets. AI doesn't need to be best, it just has to be competitive and affordable.
While I enjoyed learning about C3, the author did a disservice to readers to completely skip over PLTR commercial business. They finally have a sales team for Foundry, are giving free trials (aka capturing market share), and marketing the crap out of their offerings through demo days. PLTR is clearly in attack mode for commercial business, and I think that’s bad news for C3.
@nikolai.v510 Free business is fine but PLTR is very expensive. Mom/pop small business can't afford PLTR. AI is advertising like crazy to get those folk.
Zen Analyst profile picture
@nikolai.v510 I wish I can cover everything in one go. Big emerging markets has room for far more than 1 player.
Bet worth taking? Ya, if you like to lose bets.
I'm waiting for the price to get down to the IPO price of 42 before considering buying. I want a greater cushion before bloodying my hands with this falling knife. Once you're in, you have to hold on for dear life.
kthor profile picture

"Once you're in, you have to hold on for dear life"

@Nathan5 My entry point is basically the same as yours. Maybe $35
@TraderMikeZ I didn't say 42 is my entry- just me being more interested. 25 would be serious; as well, PLTR around 10. Buying now when overall tech is falling hard, is a sure fire way to lose money.
This article is extremely positively biased. First inaccuracy Tom Siebel is not well respected as a CEO or a visionary in the software industry! Gotham and Apollo are crushing C3.ai Ex Machina in the enterprise market. Palantir is now offering for one year, all Fortune 500 companies free Gotham software and the free services of their forward based software engineers.
At $25 per share I might be a C3 stock buyer.
@chris hafferty There's room for more than one data AI company. No industry has a "winner takes all". Besides PLTR isn't cheap as we have seen they have very few takers in the commercial sector.
What can this company do for say restaurants with robots as leading customer to tables, taking orders and bringing food can it help with that type of AI cordination and learning cause that is what is needed
Kyle Kenny profile picture
Any comment on PLTR offering their app for free to select industries to increase adoption?

Also, where does APPN fit in this equation? Direct competitor?
And still their stock tanks....
Great article! Whats your opinion on the continued insider selling, first Siebel and (announced today) Baker Hughes?
cdgingrich profile picture
Patience, Grasshopper. The sale price has not stopped dropping.
danstvguy profile picture
@cdgingrich Yeah. Can't get in this puppy until you see the all time low. LOL
Sell in May and go away......
The set-up for June is a concern.
Move on to a hedge, there are many available, VIXY.
@HereToWin A statistically proven false meme, that has been trotted out the first week of May for over 70 years. You must be tuned to the talking heads on CNBC.
darwon profile picture
@chris hafferty I read an article a few days ago that said "Buy in May, and go away." It wouldn't surprise me if the CNBC crew starts repeating this one now. Whichever way the wind blows...
Ramy Taraboulsi, CFA profile picture
I am personally very impressed with the company. Looked at their technology and the business model of AI as a service, and I see unlimited potential for it.

My main concern is that the company is about 5 years ahead of the mainstream adoption of the concept, that is, if it survives for the next 5 years, it would result in a fantastic return on investment. AI is not for the faint of heart, and I expect it to go further down before it goes up again, unless some more companies start adopting their amazing technology.

I am really surprised about its client mix: The technology is more geared towards smaller companies, but their client base is mostly larger ones. Maybe they should drop their prices and sustain a drop in revenue for the long term? Don't think they would do that unless they have balls of steel...
Ramy Taraboulsi, CFA profile picture
And, BTW, I am long on AI.
danstvguy profile picture
@Ramy Taraboulsi, CFA You have these concerns and yet you are long? Why?
Ramy Taraboulsi, CFA profile picture
@danstvguy I strongly believe in the technology and the business model. I am in for the long term...
Lock up period ends on 6/7 based on what I just looked up...
Cambridge STR profile picture
@Humble_Modesty I rarely see the end of lock up periods having an effect on share prices.
similar to palantir in that they are in slower verticals like defense and energy, await new markets
stockplaza profile picture
Very attractive at the current valuation. Especially if you believe AI will grow this decade
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