C3.AI Explained: An Introduction to C3.AI Stock Trading

As organisations increasingly recognise the transformative potential of artificial intelligence (AI), the demand for sophisticated enterprise AI solutions has increased. One of the tech companies at the forefront of this revolution is C3.ai, Inc. The company has garnered significant attention for its role in shaping the future of enterprise AI.

This article explores C3.AI (AI), its unique features, financial performance, viability, and factors that affect its stock price movement.

Main Points:

• C3.ai has evolved significantly since its founding in 2009, shifting from managing carbon footprints as C3 Energy to providing comprehensive enterprise AI solutions.
• C3.ai specialises in enterprise AI software aimed at accelerating digital transformation across various industries.
• The enterprise AI sector is projected to grow significantly. The market size is expected to reach $341.5 billion by 2030, representing a CAGR of 34.7%.

What Is C3 AI?

C3.ai, Inc. (C3 AI) is a United States-based technology company specialising in providing Enterprise AI software to accelerate digital transformation. Its headquarters are in Redwood City, California.

C3 AI, formerly C3 Energy, initially helped companies manage their carbon footprint. Their name reflected this mission, with "C" standing for "carbon" and "3" representing "measure, mitigate, and monetise" emissions. The company has since evolved into a leader in enterprise AI solutions.

An Overview of C3.ai, Inc.

This section explores C3 AI evolution, mission, and core offerings.

History and Background of C3.ai, Inc.

Like many successful tech companies, C3.ai, Inc. has evolved its focus and offerings over time to adapt to the market.

The Early Days of C3 AI (2009-2012):

• Founded in 2009 by Tom Siebel, C3 AI initially targeted the sustainability market, focusing on energy management solutions.
• Their first product, C3 Energy Management, was released in 2010.

C3 AI Niche Transition (2013-2015):

• The company expanded its offerings to include utilities in 2012, rebranding as C3 Energy.
• They developed AI-powered predictive analytics solutions for optimising power grid operations.
• The company also offered products for the oil and gas industry.

C3.ai, Inc. Embraces a Broader Market (2016-2018):

• Recognising the growth of cloud computing and IoT, the company was rebranded again as C3 IoT in 2016.
• They adapted their core applications, like the AI Predictive Maintenance, for various industries, such as manufacturing and finance. This period saw significant growth in contracts and revenue.

C3 AI Rebranding, IPO and Expansion (2019-2024):

• As the market perception of "IoT" shifted, C3.ai rebranded once more in 2019 to clearly communicate its software focus.
• C3.ai went public in 2020, but the IPO was met with initial market scepticism. This uncertainty was likely fueled by, among other factors, the news that CEO Thomas Siebel sold a significant amount of his shares shortly after the offering.
• The company significantly expanded its product line to include over 40 AI applications across various sectors.

C3 AI Mission and Vision

The core mission of C3.ai, Inc. is to enable businesses to harness the full potential of AI in driving innovation and efficiency across various industries.

The company’s core values are as follows:

• Dedication to ensuring the success of its customers.
• Upholding the highest standard of ethical conduct.
• Commitment to driving innovation in the tech industry.
• Fostering a culture of teamwork and shared problem-solving.
• Excellence and high standards for quality, performance, and customer satisfaction.

C3 AI Key Products and Services

C3.ai, Inc. offers a range of products and services that empower businesses to leverage AI for real-world results. Here's a breakdown of their core offerings:

• C3 AI Suite: This platform provides the tools and environment to develop and deploy custom AI applications. It streamlines the process for businesses with specific needs.
• C3 AI Applications: This is a collection of pre-built solutions tackling common industry problems. They can be quickly implemented to address issues like predictive maintenance, inventory optimisation, and customer relationship management.
• C3 AI Ex Machina: This no-code solution empowers even non-programmers to leverage AI. It provides user-friendly tools for data analysis and model building without needing coding expertise.
• C3 AI CRM: This AI-powered customer relationship management (CRM) solution transforms customer interactions. It offers features like sales forecasting, personalised recommendations, and real-time data visualisations – all designed to improve customer engagement and satisfaction.
• C3 AI Energy Management: This solution utilises AI to optimise energy usage across an organisation. It provides real-time insights that help businesses reduce consumption, costs, and environmental footprint.

The Market for Enterprise Artificial Intelligence

To fully understand the potential of C3.ai offerings, we must first briefly explore the Enterprise AI market in general.

Market Size of the Enterprise AI Industry

Enterprise AI is a technology that equips businesses with intelligent tools to transform their operations. It uses machine learning algorithms to analyse vast amounts of data, enabling businesses to automate tasks, predict customer behaviour and improve operational efficiency.

The Enterprise AI sector, valued at $7.02 billion in 2022 and $22.8 billion in 2023, is projected to grow exponentially, with estimates stating that it could reach $341.5 billion by 2030. This represents an impressive Compound Annual Growth Rate (CAGR) of 34.7%.

Enterprise AI Sector Comparative Analysis

C3 AI operates in a crowded market with well-established companies like IBM (IBM), Microsoft (MSFT), and SAP (SAP.DE). Additionally, numerous new startups are offering competing AI solutions.

These established players have advantages such as unique algorithms, deep industry knowledge, and strong partnerships. This, in turn, allows them to gain market share and stand out from the competition.

Nonetheless, C3 AI sets itself apart by focusing on solutions designed for specific industries. Their architecture is built for easy scaling and streamlined deployment processes. C3 AI enhances customer value and reduces the complexity of adopting AI applications by providing industry-specific AI solutions.

C3 AI Financials and Stock Performance Overview

After briefly exploring C3.AI's position in the enterprise AI market, it is important to grasp the company’s performance indicators.

C3.ai’s Stock Market Performance

• Short-Term Performance: C3.ai stock gained 0.03% in June 2024.
• Medium-Term Performance: Between the months of April and June 2024, C3.ai stock increased by 19.66%.
• Long-Term Performance: As of July 2024, C3.ai gained 4.28% YTD, but the stock lost -23.39% in 2023.
• 52-Week Range: In 2023, C3.ai's stock price fluctuated between $20.23 and $44.90 per share. This indicates a 52-week range of $24.67.

C3.ai’s Market Capitalisation and Outstanding Shares (July 2024)

• C3.ai had a market capitalisation of $3.74 billion.
• The company also held 121.32 million shares outstanding and a public float of $107.87 million, meaning that C3.ai’s shares are very liquid for public trading.

C3.ai’s Earnings Performance

• As of mid-2024, C3.ai had earnings per share (EPS) of—$2.34, indicating that the company was operating at a loss. However, this might change in the future.

Strengths and Growth Opportunities of C3.ai, Inc.

Strategic Partnerships

C3.ai strategic partnerships with significant cloud network providers, such as Alphabet (GOOG), Amazon (AMZN), and Microsoft, enhance its credibility and market reach. Additionally, its collaboration with high-profile companies like Accenture (ACN) and Raytheon (RTX) provides a strong foundation for public and private growth.

Revenue Growth

As of mid-2024, C3.ai's revenue growth reflected improvement, suggesting that the company is successfully penetrating its target markets. The company’s management also forecasted improved annual revenue growth in the coming year.

AI Market Position

The name “C3.ai” has emerged as a highly coveted name in the AI industry, a rapidly growing sector with numerous lucrative opportunities. As AI continues to advance and integrate into various industries, C3.ai is well-positioned to benefit from the market advancement.

Potential for Profitability

As of mid-2024, C3.ai has been experiencing operating losses. However, the company has the potential to build a path to profitability.

However, it is important to note that past performance does not reflect future results and that the markets are unpredictable. As such, traders and analysts should monitor C3.ai’s price chart and news to see how it will perform.

Challenges Facing C3.ai, Inc.

The following points outline the challenges affecting the growth of C3.ai, Inc.

Frequent Name Changes

C3 ai, Inc. has changed its name more often in the past 15 years, which can be perceived as a lack of clear focus or an attempt to capitalise on emerging market trends rather than a genuine shift in business strategy.

High CFO Turnover

Between 2020 and 2024, C3.ai has had four CFOs, which could indicate instability or potential financial management and reporting issues. Frequent changes in critical financial leadership can undermine investor trust.

Frequent Business Shifts

Unlike successful companies that dominate their niche before expanding, C3.ai has frequently changed its focus. Starting with energy management, it shifted to IoT and then to AI. This lack of commitment suggests that the company may not have found a core industry where it thrives.

Relatively Low Revenue

Despite being in business for 15 years, C3.ai's trailing-12-month revenue as of 2024 is just shy of $300 million, which is relatively low compared to younger companies like CrowdStrike (CRWD) and Snowflake (SNOW), which have significantly higher revenues.

High Expenses and Net Losses

C3.ai, Inc.'s financial model is a major warning sign for investors. For instance, the company had a net loss of $72.6 million against $78.4 million in revenue for the third quarter of fiscal 2024.

Revenue Concentration Risk

One customer, Baker Hughes (BKR), accounted for 35% of C3.ai's revenue at the end of fiscal 2023. Given its dependence on Baker Hughes, C3.ai is vulnerable to industry-specific risks that could impact its key client's business.

How to Trade C3.ai Stock

Traders and investors looking to gain exposure to C3.ai, Inc. (C3.ai) 's price swings have two main options: share dealing and share CFD trading.

What Is C3.ai Share Dealing?

Share dealing in C3.ai, Inc. (C3.ai) involves buying and holding its stock for a medium to long-term timeframe. The aim is to profit through two potential avenues:

• Stock Price Appreciation: Ideally, the price of C3.ai's stock will increase over time. You can then sell your shares at a higher price to earn a capital gain.
• Future Dividend Potential: Established companies often distribute a portion of their profits as dividends to shareholders. However, C3.ai Inc. doesn't currently pay dividends; it might offer them in the future.

What Is C3.ai Online Share CFD Trading?

Online share CFD trading allows for active speculation on C3.ai stock's price movements through platforms like Plus500. Unlike long-term share dealing, this approach caters to people who are comfortable with short-term trading and can control the risks inherent to CFD trading.
Instead of directly owning C3.ai shares, online stock trading utilises Contracts for Differences CFDs. These financial instruments mirror the underlying asset's price movements (C3.ai stock) but don't involve direct ownership.

• Going Long (Buy): If you believe that the price of C3.ai's shares will rise. If C3.ai's stock price increases, you make a profit.
• Going Short (Sell): If you believe that the price of C3.ai's shares will fall. If C3.ai's stock price decreases, you make a profit.

If you are interested in the rising and falling prices of C3.ai shares, check out C3.ai CFD at Plus500.

Conclusion

C3.ai operates in the high-growth AI industry, offering a compelling proposition for investors interested in this space. The company's technology facilitates enterprise adoption of AI, potentially positioning it for significant future gains. However, careful consideration is necessary. C3.ai’s stock price reflects the inherent volatility of growth stocks. Therefore, traders and investors can weigh the potential rewards against the risks before buying or selling C3.ai shares.