Artificial intelligence software provider C3.ai has been a hot stock amidst all the excitement around AI development in recent months. According to Wolfe Research, investors should be wary of chasing that rise.
Wolfe’s analysts, led by Joshua Tilton, expect C3.ai (NYSE:AI) to grow 11% in fiscal 2024, well below consensus expectations of 20%.
Wolf…
Artificial intelligence software provider C3.ai has been a hot stock amidst all the excitement around AI development in recent months. According to Wolfe Research, investors should be wary of chasing that rise.
Wolfe analysts, led by Joshua Tilton, say they expect C3.ai.
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(Ticker: AI) 11% growth in fiscal 2024, well below consensus forecast of 20%.
Wolfe Research downgraded the stock rating from Peer Perform with no price target to Underperform with a price target of $14.
C3.ai shares fell more than 9% in early trading Monday to $18.20. Shares of the company, which provides AI applications to large corporations and government agencies, are up 61% so far this year.
Wolfe Research has expressed skepticism about its recent switch from a subscription-based pricing model to a consumption-based model. C3.ai says the switch will increase revenue over time.
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“We remain skeptical about AI’s ability to meet our FY24 targets and will not undertake significant revenue increases from a planned shift to a consumption model,” the analyst wrote.
Analysts at Wolfe Research also said their analysis of C3.ai’s customer numbers suggests it’s taking longer to renegotiate contract renewals or that churn is on the rise.
Please contact Adam Clark at adam.clark@barrons.com.
