We recently compiled a list of the 20 Trending AI Stocks on Latest News and Analyst Ratings. In this article, we are going to take a look at where C3.ai, Inc. (NYSE:AI) stands against the other trending AI stocks.
The latest trends in AI stocks reflect optimism about the future of AI technology, with companies like NVIDIA continuing to dominate the space. The stock price of the chipmaker that is famous for selling AI GPUs has surged significantly in the past two years. After tripling in 2023, NVIDIA shares are up another 140% in 2024, pushing the market valuation of the firm close to $3 trillion. Analysts, like those at Bank of America, have increased their price target on the shares to around $1,500, citing the potential of NVIDIA to drive AI growth for years to come. Bank of America analysts believe the conversion of global data centers to AI-accelerated computing could require up to $500 billion annually, with NVIDIA playing a key role in this transformation.
Read more about these developments by accessing 30 Most Important AI Stocks According to BlackRock and AI News You Should Not Have Missed.
Prominent investment firms appreciate the significance of emerging AI trends. According to a report by Financial Times, investment titan Blackrock is exploring the launch of an AI-focused fund, in collaboration with tech powerhouse Microsoft and MGX, an investment firm based in Abu Dhabi. The primary aims of this fund are likely to include focus on creating data centers and funding energy infrastructure to support AI growth. NVIDIA is assisting Blackrock with estimating energy demands for new AI technologies. Analysts have forecast that energy constraints could be a potential roadblock to faster AI adoption. BlackRock will launch the fund with Global Infrastructure Partners, a firm it bought back in January for $12.5 billion.
The AI hype is truly global. Tech giant Amazon recently announced that it would invest £8 billion in the United Kingdom over the next five years as part of a major push to expand data center infrastructure across the country. Amazon rivals like Google and Microsoft have also previously announced plans to boost data center infrastructure in the UK. The former plans to invest $1 billion in the UK while the latter has confirmed around £2.5 billion to expand AI growth. Experts have stressed that AI is not just a short-term trend but a long-term transformative force. Francisco Bido, a top portfolio manager, recently underlined that AI was not a fad, noting the significant impact it had on both the top and bottom lines of many companies.
Read more about these developments by accessing 33 Most Important AI Companies You Should Pay Attention To and 20 Industrial Stocks Already Riding the AI Wave.
Our Methodology
For this article, we selected AI stocks based on the latest news and analyst ratings. These stocks are also popular among hedge funds. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A computer engineer debugging a complex AI application on a powerful workstation.
C3.ai, Inc. (NYSE:AI)
Number of Hedge Fund Holders: 18
C3.ai, Inc. (NYSE:AI) operates as an enterprise artificial intelligence software company in North America, Europe, the Middle East, Africa, the Asia Pacific, and internationally. The stock has nosedived in the past couple of weeks after the company missed analyst expectations on guidance numbers for the second fiscal quarter, even though it beat market expectations on revenue and earnings per share for the first fiscal quarter. The firm revealed that fiscal second-quarter sales were expected to be between $88.6 million and $93.6 million, with the midpoint of $91.1 million below the $91.3 million estimate. The company kept its full-year sales guidance, as it expects revenue to be between $370 million and $395 million, with the midpoint of $382.5 million below the $383.9 million estimate.
C3.ai, Inc. (NYSE:AI) is viewed with bullish sentiments on Wall Street. Wedbush recently lowered the price target on the stock to $30 from $40 and kept an Outperform rating, highlighting that the firm delivered Q1 results featuring top and bottom-line beats, which would be largely overlooked by the ASC 606 adjustment where revenue previously called software would now be called services under new guidance, impacting the company’s subscription and services growth going forward.
Overall AI ranks 19th on our list of the trending AI stocks to buy. While we acknowledge the potential of AI as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than AI but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.