C3.ai Could Become Like Microsoft in the 1990s


In the coming years, I believe that C3.ai (NYSE:AI) stock may very well become very similar to Microsoft (NASDAQ:MSFT) in the 1990s.

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Microsoft became a huge company because it let customers create detailed documents and perform complex calculations on computers for the first time. C3.ai can become a huge company by letting its customers easily create and manipulate artificial intelligence tools for the first time.

Of course, if C3.ai does become as large and powerful as Microsoft in the 1990s, AI stock will soar tremendously.

C3.ai founder and CEO Tom Siebel and InvestorPlace senior analyst Luke Lango have aptly explained the competitive advantages of the platform that C3.ai has created.

The Importance of C3.ai’s Platform

In a recent appearance at a conference, Siebel explained that C3.ai has developed a software platform that enables enterprises to create AI-driven, “predictive” tools. In other words, the company gives its customers everything they need to create and utilize AI applications.

And with C3.ai’s platform, the process of creating these applications is many times easier than developing them without it, the CEO stated.

He indicated that his company’s platform allows enterprises to analyze more data and more types of data than competing systems, while C3.ai’s platform is also much easier to utilize. Further, C3.ai’s product provides more practical insights than the other systems and, unlike the competition, automatically creates “interpretable AI models” and can be used throughout large companies, the CEO reported.

In his column, Lango explained that only Big Tech companies are effectively utilizing enterprise AI software. C3.ai is altering that situation by enabling all sorts of companies to very easily launch analysis tools based on AI, he explained.

So just as Microsoft Word gave all companies the tools to easily and effectively create complex documents and Microsoft Excel provided all companies with the tools necessary to easily and effectively perform complex mathematical calculations, C3.ai is giving all companies the tools to easily and effectively use AI to solve many of their problems and make much more effective decisions.

Why C3.ai Appears to Have What It Takes to Succeed

Because of the outstanding record of its founder and CEO and its impressive list of customers, C3.ai has been thoroughly validated.

In the 1990s, Tom Siebel founded and launched Siebel Systems, a software maker, which he sold to Oracle (NYSE:ORCL) in 2006 for $5.8 billion in cash and stock. According to Forbes, Siebel is now worth $4.2 billion.

Meanwhile, C3.ai’s customers include some big companies, such as Royal Dutch Shell (NYSE:RDS.A), Bank of America (NYSE:BAC), Koch Industries, and Con Edison (NYSE:ED). Among C3.ai’s partners are the tech giants Amazon (NASDAQ:AMZN) and Microsoft.

Also noteworthy is that AI is critically important. Given the huge amount of data to which large companies have access today, humans cannot possibly deal with it effectively. Consequently, as NetApp (NASDAQ:NTAP) stated, perhaps with slight exaggeration, ” Artificial intelligence is… the future of all complex decision making.” But there’s no doubt that AI will be an extremely important tool for businesses going forward.

The Bottom Line on AI Stock

Given the vast importance of AI and the apparent simplicity and usefulness of C3.ai’s platform, along with its impressive credentials, the company could indeed be on the verge of becoming very similar to Microsoft in the 1990s.

Meanwhile, AI stock has a fairly low market capitalization of just $6 billion. So, despite the company’s huge trailing price-sales ratio of 35x, this name does have the potential to increase by 10x or more over the next three or four years. Consequently, I believe that it’s a good name for growth investors to buy.

On the date of publication, Larry Ramer did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Larry Ramer has conducted research and written articles on U.S. stocks for 14 years. He has been employed by The Fly and Israel’s largest business newspaper, Globes. Larry began writing columns for InvestorPlace in 2015.  Among his highly successful, contrarian picks have been GE, solar stocks, MGM, and Snap. You can reach him on StockTwits at @larryramer.

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