Headquartered in California, enterprise artificial intelligence firm C3.ai (NYSE:AI) offers artificial intelligence (AI)-focused software-as-a-service (SaaS) applications internationally. 2022 has been a tough year for AI stock so far, but the company’s growth suggests that a share-price rally is imminent.
As an informed investor, it’s a good habit to focus on businesses in expanding industries. When a niche market gains traction, companies within that market can thrive.
Thankfully, C3.ai operates withing a high-conviction industry. According to Fortune Business Insights, the global AI market reached a whopping $328.34 billion in 2021. Plus, it only gets better from there. Reportedly, that same market is expected to reach $387.45 billion in 2022 and 1.39 trillion by 2029, expanding at a compound annual growth rate (CAGR) of 20.1% during that time frame.
So far, so good — C3.ai is in the right industry at the right time. What about the company itself, though? Is C3.ai exhibiting signs of growth?
Indeed, we can see the positive signs. For instance, C3.ai recently tweeted that it’s hiring for multiple positions at the company’s Redwood City headquarters. These job positions run the gamut from engineering and data science to marketing, sales and human resources.
Thriving companies are typically hiring, not firing, so this is a great sign for C3.ai. On top of that, for the second consecutive year, C3.ai was named as one of The Financial Times’ List of Fastest Growing Companies.
Digging deeper, we can see that, according to The Financial Times, C3.ai is growing at a CAGR of 43.6%. Clearly, this is a company in rapid expansion mode.
InvestorPlace contributor Muslim Farooque summed it up well, stating that C3.ai “has established its position as a market leader in enterprise AI transformation, an industry poised for massive growth ahead.” I couldn’t have said it better myself.
It might seem senseless, then, that AI stock has declined from $32 to $16 this year. Perhaps this is just the result of a broad “tech wreck.”
If and when technology stocks make a comeback, though, don’t be surprised if Wall Street suddenly favors C3.ai again. Therefore, it’s not a bad idea to take a stock position in C3.ai beforehand, in anticipation of a potential return to the $30s or even higher.
On the date of publication, David Moadel 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.