C3.AI Share Price Forecast April 2022 – Time to Buy AI?

 

Shares of AI software provider C3.AI (NYSE: AI) are in the red today, after closing at $21.29 as of April 7^th (19:59 EDT). C3.AI debuted on the New York Stock Exchange back in December 2020 at $42 per share. C3.AI shares surged by 283% by the end of the month. However, the company has failed to meet the expectations that investors had on revenue growth and profitability. As a result, C3.ai shares have dropped 85% from their all-time high.

C3.AI – Technical Analysis

According to C3.AI’s financial statement, the market cap of the company is at $2.19 billion with total assets worth $1.188 billion. Revenue for 2021 is at $183.22 million compared to $156.67 million in 2020.

Oscillators such as Relative Strength Index (14)(45.74),  Stochastic %K (14, 3, 3)(40.16),  Commodity Channel Index (20)(−11.67),  Average Directional Index (14)(15.12) and  Awesome Oscillator(1.15) are neutral. Moving averages such as Exponential Moving Average (10)(22.40),  Simple Moving Average (10)(22.76),  Exponential Moving Average (20)(22.26),  Simple Moving Average (20)(21.68) and Exponential Moving Average (30)(22.43) are indicating a sell action.

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Recent Developments

C3.ai  was founded by Thomas Siebel in 2009. The company was included in the 2019 “CNBC Disruptor 50” list. It has also played a key role during the COVI-19 pandemic by leveraging AI. C3.ai is operating in a new industry called enterprise artificial intelligence (AI) where it develops customizable AI applications for any company. The company has experienced an explosion of interest in its applications where the number of industries it serves has doubled to 14. This has resulted in robust growth and a surging customer count. The company revealed further growth in its customer count, reaching 110 according to the most recent third quarter of fiscal 2022.

C3.ai’s management expects the company to generate $252 million in revenue for the fiscal 2022 full year. The company currently has $469 million in remaining performance obligations (RPOs), which is a 90% increase. The company’s largest revenue sources include the oil and gas industry.  For instance, Shell uses C3.ai’s machine learning models to monitor 1000 devices capable of making 1.3 trillion predictions per month.

However, C3.ai has made one of its most impressive deals yet.  The U.S. Department of Defense has enlisted the company to help accelerate the government’s adoption of artificial intelligence.  They will spend $500 million over the next 5 years. This could be an enormous boost to the company’s RPOs in the future. Additionally, the company is getting collaboration opportunities from both Microsoft and Alphabet’s Google.

Should You Buy AI Shares?

The management of the company has indicated that the total market opportunity could be worth $271 billion by 2024. There is still a long potential for growth, especially for investors who decide to buy in at the presently beaten-down price.  Currently, the company has over $1 billion in cash and equivalents. All of these are good signs for the company.

However, The company is still struggling with losses. Some estimates indicate that the company could lose almost $94 million during fiscal 2022. However, many have pointed out that it’s still in its growth phase and will eventually transition into positive earnings per share.

While this could take a few years, the company has a lot of cash on hand to weather this period. There are high chances that the company can produce an incredibly strong, unique business in the long run. Thus, investors should view the 85% fall in C3.ai shares as a long-term buying opportunity.

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