C3.ai stock forecast 2025: Is it time to buy now?

 

Few emerging technologies are as exciting as artificial intelligence. We have witnessed its ability to be applied in new ways, from quickly analyzing large amounts of data to improve the efficiency of hardware and software. C3.ai(AI) is one of the only companies in the world that develop artificial intelligence into independent services. In short, artificial intelligence is its entire business.

 Investors avoided such stocks this year because large technology companies began to engage in artificial intelligence projects, raising concerns about increased competitive threats.

 However, C3.ai continued to increase revenue, narrowed its losses, and added 82% of its customers in the fourth quarter of fiscal 2021. Therefore, the stock price has fallen about 60% so far this year, which may be a huge opportunity for those who want to get involved in this field.

 A unique business case

 Imagine that if a company needs to develop its own artificial intelligence, simplify data analysis, improve network security efficiency, detect fraud, and even combat money laundering, it has to complete thousands of hours of programming work, and requires a lot of money and time.

 C3.ai provides thousands of pre-built applications that have been proven to reduce the amount of code required by 99%. Consider the resources the company can save by following this route instead of building the application from scratch. These products from C3.ai can also be customized and can be extended to meet different needs. In short, the company provides basic artificial intelligence services that the company can build and adapt to all their needs.

 Perhaps the most incredible part of C3.ai is its speed of delivering solutions. The company claims that it can deploy an artificial intelligence project as required within 3 to 6 months after the first briefing. The company stated that this time frame is 26 times faster than using other alternative technologies.

 Improve financial performance

 C3.ai is a newbie to the stock market and went public in December last year. Although the market opened higher and hit a record high of US$183 per share, the stock is still hovering at around US$60, close to historical lows. Investors seem to expect stronger operating performance almost immediately, but this is not always feasible in unpredictable emerging industries. As a technology company, it is also one of the broader companies that have been sold off in recent months.

 From a financial point of view, the company achieved almost all targets. Its revenue and gross profit in the fourth fiscal quarter increased by 26% year-on-year. Total revenue for the 2021 fiscal year was US$183.2 million, an increase of 17% year on year.

 Like most software-as-a-service companies, C3.ai has a high gross profit margin of over 75%. Its net loss stems from continuous spending on sales, marketing, and research and development, and investment in the overall business to drive continuous growth. The high gross profit margin provides the company with an opportunity to expand. The theory is that once the company is large enough and its income is stable, it can cut these costs and start to create net profits for investors.

 Overall, the company narrowed its full-year net loss from $69 million in the fiscal year 2020 to $55 million in the most recent year. With an 82% increase in new customers and a record high of 91 applications in production, the company should see strong revenue growth and further reduce losses in the next 12 months.

 Key points forward

 In summary, C3.ai is the largest player in the individual artificial intelligence industry, with more than 4.8 million machine learning models in dozens of industries, and providing impressive 1.5 billion AI-driven predictions every day. Although larger technology companies may try to compete internally or develop models, the cost and time savings provided by the company cannot be ignored.

 It now has a market capitalization of $6 billion and is still flexible enough to shift to growth areas when necessary. And as such a relatively small entity, its work provides some exciting visions to understand what it can achieve when it expands.

 Investors should pay close attention to the company's revenue growth in the next few years because the impetus provided by new customers should drive the company to achieve profitability.