what happened
In a great month for AI stocks, C3.ai (AI -7.08%) The company surged 125%, making it one of the big winners, according to data from S&P Global Market Intelligence.
C3.ai’s share price has been volatile throughout the year, but surged after the company’s faster-than-expected earnings results. The short-selling investigation was completed without discovering any fraudulent activity, but an additional tailwind was Nvidia provided much better-than-expected guidance for the second quarter, showing investors that demand for AI chips is surging.
Most of the rally in the stock happened in the second half of the month after the earnings announcement, and then surged on the news of Nvidia.
AI data by YCharts
so what
C3.ai reported fourth-quarter revenue in the $72.1 million to $72.4 million range, flat year-over-year, but below its forecast of $70 million to $72 million in its preliminary earnings report on May 15. announced a slight increase. .
Adjusted operating loss of $23.7 million to $23.9 million exceeded the expected loss of $24 million.
But perhaps the more significant news is that the company has announced that it has closed an investigation into previous short seller allegations and found no issues with its accounting.
The stock surged 23.5% on May 15 and has continued to climb from there. The news appears to have triggered a short squeeze in the stock, as trading activity has been brisk throughout the month.
NVIDIA’s report sent stocks higher after leading AI chip maker NVIDIA announced a bigger than expected second-quarter earnings boost, injecting more hype into the sector and boosting artificial intelligence stocks broadly. rice field.
so
C3.ai announced after-hours earnings on May 31, but the market didn’t like it. The company’s outlook for fiscal 2024 was weaker than expected, despite its fourth-quarter results.
The company expects revenue to rise from $295 million to $320 million this year, representing 15% growth at midpoint. It also expects an adjusted operating loss of $50 million to $75 million for the full year, but management said it expects to finish fiscal 2024 with an adjusted profit.
Despite the company’s claims that demand for its products is surging, C3.ai still has a lot to prove, given its modest growth rate and high valuations, but it’s bolstering its interest in AI. Considering this, volatility is likely to continue.
Jeremy Bowman has no positions in any of the mentioned stocks. The Motley Fool has a position with Nvidia and recommends Nvidia. The Motley Fool recommends his C3.ai. The Motley Fool has a disclosure policy.
