Are you interested in investing in a high-growth artificial intelligence (AI) company? C3.ai (NYSE:AI) stock may be worth considering, especially with its upcoming earnings report in September. With a market capitalization of US$3 billion, C3.ai has a track record of surpassing expectations, leading to double-digit increases in its stock price after the last two earnings releases. There is speculation that this trend may continue next month.
Despite a notable short interest of 27.6%, C3.ai stock has historically surged on positive financial news. The company is undergoing rapid expansion, which could result in another increase in its stock price following the upcoming earnings report.
C3.ai is an enterprise AI vendor that has recently introduced generative artificial intelligence to its product offerings, gaining attention from customers. The company has experienced favorable responses to its financial results, with a 19% increase in its stock price after the May 29th report and a 24.5% jump after the February earnings release. Higher-than-expected revenue and decreased adjusted earnings losses have boosted investor confidence.
Revenue growth for C3.ai is on the rise as more businesses adopt AI solutions, including generative AI. The company’s revenue base is expanding, with key industries such as Federal, Defense, Aerospace, Manufacturing, and Agriculture contributing to recent growth. C3.ai reported its fifth consecutive quarter of accelerating revenue growth in May, with subscription revenue growth hitting 41% year-over-year.
Investors are eagerly anticipating C3.ai’s next earnings report, as the company has consistently outperformed management’s expectations in recent quarters. While management has forecasted 16% to 23% year-over-year revenue growth for the July quarter, historical data suggests that this estimate may be conservative.
Individuals looking to invest in C3.ai stock in Canada should consider the stock’s volatility and their risk tolerance. It is advisable to limit exposure to C3.ai stock to low single-digit percentages of a portfolio to mitigate potential losses from volatile fluctuations. Investing directly in C3.ai stock on the New York Stock Exchange introduces currency risk, as the value of the investment may fluctuate with exchange rate changes between the US Dollar and the Canadian Dollar.
One option for Canadian investors is to own C3.ai stock through an Exchange Traded Fund (ETF) that provides exposure to AI companies. This strategy helps diversify holdings, eliminate direct currency risk, and potentially offer exposure to a broader range of promising AI growth stocks. However, there are currently no large AI-focused Canadian ETFs that hold significant positions in C3.ai stock.
