Retail investor darling C3.ai sank about 8% on Thursday as its forecast for a bigger-than-expected annual loss sparked worries about the costs stemming from rising investments in artificial intelligence.<\/p>\n
The AI-based software maker had said on Wednesday growing spending on pilot programs with potential customers will be a drag on its profitability and cash flow in the near term, after it had doused investor hopes of a profit with a sobering outlook in September.<\/p>\n
C3.ai is also seeing sales cycles get extended as customers create new governance functions to approve applications before use, a potential concern for AI spending that has so far been a bright spot in an otherwise dour year for technology companies.<\/p>\n
Coupled with the growing spending on pilot programs, it has added pressure on the company’s profitability outlook.<\/p>\n
The stock has gained over 160% so far this year, driven by a surge in interest in AI-linked stocks after chatbot ChatGPT’s successful launch late last year.<\/p>\n
C3.ai is a popular name among retail traders, and was among the top ten trending stocks on Thursday on amateur investor-focused website Stocktwits.<\/p>\n
However, this year it has also faced the scrutiny of short sellers with a short interest of 31.7% of its outstanding shares, data from S3 Partners showed.<\/p>\n
Kerrisdale Capital in April accused the company of “poor customer traction, failing sales partnerships and financial pressures”.<\/p>\n
Brokerage D.A. Davidson & Co cut its price target on the stock to $28 from $30 “given the deterioration of profitability”.<\/p>\n
The average rating of 14 analysts covering the stock is “hold”, and their median price target is $28, according to LSEG.<\/p>\n
On Wednesday, C3.ai said it expects annual adjusted operating loss to be between $115 million and $135 million, compared with its prior forecast of $70 million-$100 million.<\/p>\n
Revenue of $73.2 million in the second quarter ended Oct. 31 missed LSEG estimates of $74.3 million.<\/p>\n","protected":false},"excerpt":{"rendered":"
Retail investor darling C3.ai sank about 8% on Thursday as its forecast for a bigger-than-expected annual loss sparked worries about the costs stemming from rising investments in artificial intelligence. The AI-based software maker had said on Wednesday growing spending on pilot programs with potential customers will be a drag on its profitability and cash flow in the near term, after it had doused investor hopes of a profit with a sobering outlook in September. C3.ai is also seeing sales cycles get extended as customers create new governance functions to approve applications before use, a potential concern for AI spending that […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[7],"tags":[],"class_list":["post-800723","post","type-post","status-publish","format-standard","hentry","category-it-2"],"acf":[],"_links":{"self":[{"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/posts\/800723","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/comments?post=800723"}],"version-history":[{"count":0,"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/posts\/800723\/revisions"}],"wp:attachment":[{"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/media?parent=800723"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/categories?post=800723"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/tags?post=800723"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}