Replies to post #14141 on Keeping It Simple

[eastunder]

C3.ai upgraded to Outperform from Perform at Oppenheimer; tgt $40
9:58 AM ET, 11/21/2023 - Briefing.com
. Analyst Timothy Horan added, "Upgrading C3.ai to Outperform from Perform with a $40 PT, or 10.0x FY25E FV/ revenue. Our FY23-24E revenue is intact, 1% and 4% above consensus, respectively. Our 6/29/23 initiation was positive on C3.ai's long-term growth opportunity, but neutral on the stock. Since then, C3.ai has reset guidance, worked through a model transition to usage-based, and shown real-world customer benefits. AI stock has underperformed by 20% since mid-June, while revenue growth accelerates (0.1% in F4Q23 to 23%E in F2Q24, reporting 12/6). The "AI" theme is real and durable, with C3.ai well-positioned as one of the few pure plays helping customers drive new revenue sources/major productivity improvements; should accelerate growth into '25E."

[eastunder]

Sam Altman returns to OpenAI in a bizarre reversal of fortunes

https://www.cnn.com/2023/11/22/tech/openai-altman-returns-hnk-intl/index.html

Sam Altman has agreed to return to lead OpenAI, the company said in a Tuesday post on X, just days after his surprise ouster as chief executive sparked an employee revolt that threatened to undermine what has been the leading company in the fledgling artificial intelligence industry.

“We have reached an agreement in principle for Sam Altman to return to OpenAI as CEO with a new initial board,” the company said, adding that the board will be chaired by Bret Taylor, a former co-CEO of Salesforce. Former Treasury Secretary Larry Summers will also join the board, alongside existing director, Quora CEO Adam D’Angelo.

“We are collaborating to figure out the details,” it said.

In his own post on X, formerly Twitter, Altman wrote that he is “looking forward” to returning to OpenAI and building on the firm’s “strong partnership” with Microsoft, which is the ChatGPT maker’s biggest financial backer.

The announcement appears to bring to an end days of chaos for the AI industry that included negotiations over who should lead OpenAI and how the firm should be run, as well as broader discussions about just how fast the arms race to develop AI technology should be moving.The details of Altman’s firing and re-hiring remain murky. In its announcement Friday, OpenAI claimed that Altman had been insufficiently “candid” with the board.

That ambiguous language sent the rumor mill flying. But a key factor in Altman’s ouster was the presence of tensions between Altman, who favored pushing AI development more aggressively, and members of the original OpenAI board, who wanted to move more cautiously, according to CNN contributor Kara Swisher, who spoke to sources knowledgeable about the crisis.

As of Monday morning, Nadella had announced that Altman, along with fellow OpenAI co-founder Greg Brockman, would be joining Microsoft to lead a new AI research division. OpenAI said it had hired former Twitch chief Emmett Shear as interim CEO.

But then hundreds of OpenAI employees, nearly the company’s entire staff, threatened to leave, potentially for Microsoft, if the company’s board didn’t resign and reinstate Altman as CEO.

It’s unclear how Shear will be affected by Altman’s return. Posting on X, Shear wrote: “I am deeply pleased by this result, after (some) 72 very intense hours of work … I’m glad to have been a part of the solution.”

Brockman is also returning to OpenAI, according to his post on X.

Ultimately, Microsoft and Altman appear to be the big winners from the dust-up: Altman will continue leading the firm he helped to found, now with a board that is, in theory, more supportive of his vision.

And Microsoft has wrested more control over the company it invested billions in to help bolster its ambitions in developing AI, which many in Silicon Valley think will be the most important wave of technological advancement in the coming decades.

“We are encouraged by the changes to the OpenAI board,” Microsoft CEO Satya Nadella said on X. “We believe this is a first essential step on a path to more stable, well-informed, and effective governance.”

Altman’s vision to quickly roll out and commercialize AI tools also appears to have won out.

Publicly, Altman has long cautioned about risks posed by AI, and he?has pledged to lawmakers and customers that he would move OpenAI forward responsibly.

“Is [AI] gonna be like the printing press that diffused knowledge, power and learning widely across the landscape that empowered ordinary, everyday individuals that led to greater flourishing, that led above all to greater liberty?” he said in a May Senate subcommittee hearing pressing for regulation. “Or is it gonna be more like the atom bomb — huge technological breakthrough, but the consequences (severe, terrible) continue to haunt us to this day?”

But inside the company, Altman had been pushing to bring products to market more quickly and to sell them for a profit.

Altman announced a few weeks ago at OpenAI’s first-ever developer day that the company would make tools available so anyone could create their own version of ChatGPT. OpenAI has also worked with Microsoft to roll out ChatGPT-like technology across Microsoft’s products.

OpenAI and iPhone designer Jony Ive had also reportedly?been in talks to raise $1 billion from Japanese conglomerate SoftBank for an AI device to replace the smartphone.

— CNN’s Juliana Liu and Diksha Madhok contributed reporting.

[eastunder]

Hot AI Stock C3.ai Falls As Fiscal Q2 Revenue Misses, Guidance Light
https://www.investors.com/news/technology/ai-stock-c3ai-earnings-c3ai-stock-news-q32023/?src=A00220
REINHARDT KRAUSE05:52 PM ET 12/06/2023

C3.ai (AI) on Thursday reported mixed results for its fiscal second quarter, including a weaker-than-expected revenue outlook. AI stock fell sharply in after-hours trading.

C3.ai posted a smaller-than-expected adjusted loss for AI stock while the revenue growth stock missed Wall Street targets. Revenue guidance came in below expectations.

For the quarter ending Oct. 31, C3.ai said it lost 13 cents per share on an adjusted basis. That compared with an 11-cent loss a year earlier.

Revenue rose 17% to $73.2 million. Wall Street analysts polled by FactSet had predicted a loss of 18 cents a share on revenue of $74.3 million.

For the current quarter ending in January, the company predicted revenue of $76 million at the midpoint of guidance. Further, analysts projected revenue of $77.7 million.

"We are seeing a return to accelerating revenue growth as we continue our transition to a consumption-based pricing model," said Chief Executive Thomas Siebel in the earnings release.

The software maker has backed off its target to turn profitable on an adjusted basis by the fourth quarter of this fiscal year amid growing investments in artificial intelligence.

AI Stock: Profitability Pushed Out

On the stock market today, AI stock tumbled around 8% to near 26.80 in extended trading.

AI stock had gained 172% in 2023 ahead of the C3.ai earnings report.

The company has told analysts it expects revenue growth to reaccelerate as more AI pilot projects ramp up into commercial production.

The software maker has backed off its target to turn profitable on an adjusted basis by the fourth quarter of this fiscal year amid growing investments in artificial intelligence.

Meanwhile, C3.ai is one of many AI stocks to watch.

Also, C3.ai had a Relative Strength Rating of 93 out of a best-possible 99 heading into the earnings report, according to IBD Stock Checkup.

Further, C3.ai's initial public offering in early December 2020 raised $651 million.

The software maker helps companies build artificial intelligence applications, and targets the energy, financial services and defense markets. But it hasn't disclosed pricing for new generative AI products.

In late 2022, the enterprise AI software provider changed its pricing model from subscription to consumption-based.

[eastunder]

AI cpps at 31.22 & Gap at 28.40

[eastunder]

Better AI Stock: Palantir Technologies vs. C3.ai
Harsh Chauhan, The Motley Fool
Sat, January 20, 2024 at 6:20 AM MST·7 min read
https://finance.yahoo.com/m/db498ebf-e58b-3cf7-b73d-735cc79e658c/better-ai-stock%3A-palantir.html


Shares of Palantir Technologies (NYSE: PLTR✔️) and C3.ai (NYSE: AI✔️) have been in red-hot form on the stock market over the past year, gaining 140% and 107%, respectively, thanks to the expectation that the adoption of artificial intelligence (AI) could supercharge their growth in the long run.

The terrific gains that these stocks delivered lately may seem a tad surprising at first, considering the pace at which Palantir and C3.ai are growing. Palantir's growth has slowed down of late thanks to a challenging scenario in its government-related business. C3.ai has been struggling to put its foot on the gas ever since it switched its business model from a subscription-based one to a consumption-based one.

Not surprisingly then, Palantir and C3.ai stocks trade down 21% and 43%, respectively, from their 52-week highs. However, considering that both companies could take advantage of the growing adoption of AI software in the long run, investors may be wondering if they should consider using the pullback as a buying opportunity. If that's indeed the case, which one of these two AI stocks warrants a buy?

Let's find out.

Palantir Technologies' AI business is gaining traction

Palantir Technologies' full-year 2023 revenue outlook of $2.22 billion suggests that its top line is on track to increase 16.5% this year. But for a stock that's trading at 17 times sales, investors may be having second thoughts about whether Palantir is worth investing in right now, given the rich valuation.

However, a closer look at Palantir's business suggests that its AI business is gaining traction. The number of commercial customers using Palantir's solutions increased an impressive 45% year over year in the third quarter of 2023 to 330. For comparison, the company's overall customer count was up 34% year over year to 453.

The stronger growth in the commercial customer count also led to a robust 23% year-over-year increase in Palantir's commercial revenue in the last reported quarter to $251 million. This was far better than the 12% growth that the government business recorded. The healthy growth in Palantir's commercial customer base and revenue isn't surprising as its Artificial Intelligence Platform (AIP), which was launched in April last year, is witnessing rapid adoption.

In the third quarter of 2023, for instance, the number of users on AIP nearly tripled. Palantir also points out that close to 300 organizations have deployed AIP within a short span of just five months since the platform's launch. Even better, Palantir is looking to aggressively take its AIP to commercial customers with the help of boot camps.

Palantir management points out that the company has redesigned its "go-to-market approach around AIP boot camps, which has allowed us to deliver real workflows on actual customer data in five days or less versus our traditional pilots, which generally take one to three months." This seems to be accelerating Palantir's commercial deal growth as well.

In the third quarter of 2023, Palantir says that the "deal count for our U.S. commercial business is 2.4x what it was in Q3 of last year and U.S. commercial TCV closed at $252 million, up 55% year over year on a dollar-weighted duration basis." All this indicates that AI is indeed having a positive impact on Palantir's performance, which possibly explains why analysts have sharply increased their revenue growth expectations.

What's more, consensus estimates project Palantir's earnings to increase at an annual rate of 85% for the next five years, suggesting that it could indeed become a top AI stock in the long run. That won't be surprising as Palantir is considered to be the leader in the AI software platforms market, which is expected to grow rapidly in the long run.

C3.ai is expected to step on the gas

Unlike Palantir, which made its name by providing software and data analytics solutions to government agencies, C3.ai is a pure-play provider of enterprise AI software. However, its tepid growth suggests that the company isn't making the most of the end-market opportunity just yet. Market research firm IDC estimates that the AI software market could be worth a whopping $251 billion in 2027 as compared to $64 billion in 2022, clocking a compound annual growth rate of 31%.

For comparison, C3.ai is anticipated to clock just 15% revenue growth in the current fiscal year to $306 million. The good part is that analysts are anticipating an uptick in the company's growth from the next fiscal year.

This potential improvement in C3.ai's growth can be attributed to the ramp-up of its consumption-based revenue model. C3.ai used to enjoy greater revenue visibility and pipeline when it was following a subscription-based model, which allowed it to lock customers into long-term contracts. However, the company felt that such a model raised the entry barrier for new customers, so it switched to a pay-as-you-go model just over a year ago.

As a result, C3.ai's growth rate dropped. But the good part is that the company is currently in the second phase of this transition. During this phase, C3.ai says that more customers are set to convert to its consumption-based model, and its revenue decline will hit bottom. Additionally, C3.ai anticipates its revenue and margin growth will start improving from this phase.

C3.ai expects to enter the third phase of the transition from fiscal 2025. Management points out that most of its customers would have converted to the consumption model in the third phase, and its revenue growth will accelerate to pre-transition levels. It is worth noting that C3.ai's annual revenue jumped an impressive 38% in fiscal 2022 -- when the transition had yet to begin -- to $253 million, up from 17% growth in the previous fiscal year.

This explains why C3.ai is expected to clock 20%-plus growth rates over the next couple of fiscal years. Analysts also expect the company's earnings to increase at an annual pace of almost 51% for the next five years. Another impressive thing to note is that C3.ai saw an improvement in customer engagement after the transition.

In the second quarter of fiscal 2024, it witnessed a 148% year-over-year jump in the number of new agreements while the number of bookings doubled. So, just like Palantir, even C3.ai is expected to capitalize on the AI software market and deliver healthy growth going forward. But which one of these two stocks looks like a better investment?

The verdict

We have already seen that Palantir sports an expensive sales multiple of 17. C3.ai, for comparison, is cheaper at 11 times sales. Given that both companies are forecasting an acceleration in revenue growth and should deliver healthy earnings growth, investors looking for a value play may want to opt for C3.ai.

However, there isn't much difference in the forward sales multiples of both companies.

As such, it comes down to the risk appetite of investors looking to buy one of these two AI stocks right now. While conservative investors can opt to buy C3.ai given its lower valuation and growth prospects, those with a more aggressive risk profile may not mind paying a higher valuation for Palantir, given that it can benefit from the growth in both government and commercial AI spending in the long run.

[eastunder]

AI cpps 28.78

[eastunder]

Artificial Intelligence Play C3.ai Climbs On Earnings Report, Outlook
FacebookTwitterLinkedInShare Licensing

REINHARDT KRAUSE07:48 AM ET 02/29/2024

https://www.investors.com/news/technology/artificial-intelligence-play-c3-ai-climbs-on-earnings-report-outlook/?src=A00220

Shares in C3.ai (AI) climbed after the company reported a narrower-than-expected loss for its fiscal third quarter earnings while revenue topped estimates. Revenue guidance for AI stock met expectations.

The software maker reported January quarter earnings after the market close on Wednesday. On the stock market today, AI stock popped 14% to 33.87 in early trading.

In fiscal Q3, C3.ai said it lost 13 cents per share on an adjusted basis. That compared with an 6-cent loss a year earlier.

Revenue rose 18% to $78.4 million. Wall Street analysts polled by FactSet had predicted a loss of 28 cents a share on revenue of $76.1 million.

For the current quarter ending in April, the company predicted revenue of $84 million at the midpoint of guidance. Further, analysts projected revenue of $83.9 million.

"Profitability was much better than guided, as the non-GAAP operating loss of $25.8 million was 40% less than modeled," said Oppenheimer analyst Tim Horan in a report.

"The company is prioritizing pilot trials and transitioning to consumption priced services, pressuring growth and margins short term, but is over the worst. C3's short interest is 34% of float so stock will remain volatile."

AI Stock: Profitability Pushed Out

AI stock had gained about 3% in 2023 ahead of the C3.ai earnings report. Shares are up 33% over the past year.

The company has told analysts it expects revenue growth to reaccelerate as more AI pilot projects ramp up into commercial production. For fiscal 2025, analysts currently model revenue growth of 19.3%, up from 14.6% in the current fiscal year.

The software maker has backed off its target to turn profitable on an adjusted basis by the fourth quarter of this fiscal year amid growing investments.

Also, C3.ai had a Relative Strength Rating of 47 out of a best-possible 99 heading into the earnings report, according to IBD Stock Checkup.

The software maker helps companies build artificial intelligence applications, and targets the energy, financial services and defense markets. But it hasn't disclosed pricing for new generative AI products.

Meanwhile, C3.ai is one of many AI stocks to watch.

Follow Reinhardt Krause on X, formerly called Twitter, @reinhardtk_tech for updates on artificial intelligence, cybersecurity and cloud computing.

[eastunder]

AI earnings gap up


---------------------------------------------
Wedbush Raises C3.ai's PT to $40 From $35 After 'Strong' Fiscal Q3 Results, Guidance, Notes Greater Confidence in Story; Keeps Outperform Rating
----------------------------------------------
Retail investors' AI bet C3.ai's shares climb on strong results, forecast
7:25 AM ET, 02/29/2024 - Reuters
Feb 29 (Reuters) - C3.ai's shares jumped about 18% in premarket trading on Thursday after strong demand for AI software helped the company deliver third-quarter results ahead of analyst expectations and firmed its full-year forecast on strong enterprise demand.

The company's shares have surged 165% since the end of 2022, valuing the company at $3.56 billion, drawing strong interest from active traders, especially retail investors, looking to bet on the boom in artificial intelligence (AI).

However, in that same period, Nvidia, the poster child for AI, has rocketed 431%, or more than five-fold, in market value.

In the latest quarter, strong demand from federal customers helped C3.ai's subscription revenue increase 23% to $70.4 million and beat analysts' average estimate of $66.77 million, according to LSEG data. Subscription revenue is about 90% of total revenue.

"The company is having notable success in the federal sector while signing more multi-year subscription agreements that trend similarly to consumption revenue behavior," said D.A. Davidson analyst Gil Luria.

C3.ai's stock was last trading at $34.98, on track to hit a more than six-month high at market open and already above the $28.50 median price target of the 14 brokerages covering C3.ai.

Their average rating, according to LSEG data, is "hold." D.A. Davidson has an equivalent rating on C3.ai but raised its target price to $30 from $28.

Redwood City, California-based C3.ai also narrowed its 2024 revenue forecast to $306-$310 million, from $295-$320 million.

Still, the new forecast was largely above analysts' estimates of $306.1 million.

The company also said its chief accounting officer Hitesh Lath will transition to the chief financial officer role, effective March 1, replacing Juho Parkkinen.

Parkkinen will remain at the company as vice president of finance, C3.ai said. (Reporting by Medha Singh in Bengaluru; Editing by Savio D'Souza)

[eastunder]

Why C3.ai Stock Rocketed Higher Thursday Morning
Danny Vena, The Motley Fool
Thu, Feb 29, 2024, 9:24 AM MST3 min read

https://finance.yahoo.com/news/why-c3-ai-stock-rocketed-162410723.html

Shares of C3.ai (NYSE: AI) moved sharply higher Thursday morning, soaring by as much as 26.4%. As of 10:40 a.m. ET, the stock was still up by 24.3%.

The catalyst for that surge was the quarterly report it delivered after the close Wednesday, which revealed that the artificial intelligence (AI) specialist may finally be tapping into the widening adoption of AI.



For its fiscal 2024 third quarter, which ended Jan 31, C3.ai generated revenue of $78.4 million, up 18% year over year. Subscription revenue grew even faster, up 23% to $70.4 million, accounting for 90% of the total. The results were further aided by the company's expanding gross profit margin of 58%, which edged higher from 56% in fiscal Q2.

Profits continued to be elusive. C3.ai booked a net loss of $72.6 million, resulting in an adjusted loss of $0.13 per share -- more than double its loss of $0.06 per share in the prior-year quarter.

To put those results into context, analysts' consensus estimates were calling for revenue of $76.1 million and a loss of $0.28 per share, so the company beat on both top and bottom lines.

Better days to come

C3.ai's results might not seem like much to celebrate, particularly given its worsening bottom-line losses. However, there are indications that better days could be coming as management increased its full-year guidance and investors let out a collective cheer.

The company cited the increasing number of new agreements it has signed with customers -- it inked 50 during the quarter, up 85% year over year. Of those, 29 were new pilots. Management expects these deals will translate into commercial revenue in the months and years to come.

For its fiscal 2024 fourth quarter, management forecasts revenue of between $82 million and $86 million, which would amount to growth of roughly 10% at the midpoint. For the full year, C3 is forecasting revenue of $306 million to $310 million, a year-over-year increase of about 15% at the midpoint. Most of that range tops analysts' consensus expectation for revenue of $306.2 million. However, as a result of its increasing investments, the company said its losses will continue, and it no longer expects to be profitable by the fiscal fourth quarter.

C3.ai still needs to show it can capitalize on the AI boom and turn a profit. Until it makes progress on those fronts, there are better AI stocks to choose from.