C3.Ai Experiences Robust Growth Amid Soaring AI Demand, Analyst Predicts Over 30% Expansion

A Wedbush analyst, Daniel Ives, has maintained an Outperform rating for C3.Ai, Inc., a company listed as AI on the New York Stock Exchange, and has increased their price target from $35 to $40. This optimistic adjustment follows C3.Ai's announcement of third-quarter revenues, which amounted to $78.4 million, surpassing the projected estimates of $76.14 million.

Growth Driven by AI Demand

Ives recognizes the recent quarter as a significant leap forward for C3, highlighting a surge in demand for the company’s AI solutions used across various businesses to enhance operations and optimize processes. Thanks to its effective strategies and partnerships, C3.Ai has experienced a staggering 337% year-over-year and 62% quarter-over-quarter growth in partner bookings. The company’s focus on AI has been fruitful, compelling Ives to adjust the forecast for the fiscal year 2024 revenues to $308.4 million, a marginal increase from the previous forecast of $308.2 million.

Industry Analyst Perspectives

Another analyst from Canaccord Genuity, Kingsley Crane, also adjusts the price target upwards from $27 to $31 while maintaining a Hold rating. The recent advancements in the AI industry have contributed to a positive outlook, which was reflected in C3's anticipated third-quarter results. With generative AI scenarios becoming a key factor for customer engagement, as highlighted by the 17 of 29 pilots initiated this quarter, there is a palpable excitement about C3.Ai’s potential.

Mike Cikos of Needham, continuing with a Hold status, remarks on C3.Ai’s 85% booking growth with the US Federal as a testament to the firm’s expanding influence in the Public Sector. Meanwhile, Eric Heath from KeyBanc Capital Markets has reaffirmed a Sector Weight rating, voicing concerns over the company's capacity to extend its reach beyond specialized AI applications and its technological uniqueness within broader markets.

On a promising note, Oppenheimer analyst Timothy Horan has also assigned an Outperform rating with a price target matching that of Wedbush at $40. Horan cites the long-term benefits and robust potential of AI, deeming C3.Ai as aptly positioned to harness these advantages despite the possibility of stock volatility due to a significant short interest in the company.

JMP analyst Patrick Walravens maintains a Market Outperform rating and concurs with the $40 price target. He underscores C3.Ai's prospects for capital gain by servicing an extensive Total Addressable Market (TAM), projected to reach approximately $792 billion by 2026. Adjustments in forecasts are also made by Walravens, predicting an increase in research and development spending with expectations of strong revenue growth.

In the midst of these analyses, C3.Ai's shares have shown an impressive rally, climbing by 23.9% to $36.79, further underlining market confidence in the AI enterprise's growth trajectory.

AI, Growth, Revenue