It’s understandable if some financial traders are skeptical of enterprise artificial intelligence (AI) company C3.ai (NYSE:AI). After all, AI stock rallied hard in early 2023. Yet, C3.ai’s growth story isn’t over yet. There are still reasons to think about investing in this highly touted software startup.
It seems like every publicly listed technology company is jumping on the machine-learning bandwagon nowadays. CEOs are purposely mentioning AI multiple times during conference calls, just to drum up investor interest.
In contrast, C3.ai definitely isn’t a bandwagon jumper. The company was been a machine-learning mainstay before the trend picked up steam in 2023. So, let’s recap three great reasons to think about buying AI stock now.
AI Stock Provides Pure, Direct Niche-Market Exposure
By a long shot, C3.ai isn’t the biggest company involved in machine learning. As of this writing, C3.ai is No. 13 among the largest AI businesses based on market capitalization.
On the other hand, you’re definitely not getting pure-play machine-learning exposure if you invest in Microsoft (NASDAQ:MSFT) or Nvidia (NASDAQ:NVDA). Unlike those tech titans, C3.ai is, to quote Alex Sirois, “considered to be among the most direct ways to play the AI boom.”
Sure, Microsoft invested in the technology of an AI company (specifically, OpenAI’s ChatGPT chatbot). However, C3.ai actually is an AI company first and foremost. This isn’t to suggest that you shouldn’t invest in Microsoft, Nvidia and so on. It’s possible to own shares of a variety of technology companies, while also boosting your portfolio’s machine-learning exposure with AI stock.
C3.ai Has a Notable Roster of Clients
C3.ai serves the public and private sectors and has significant clients in both of those categories. The company’s public-sector clients include the Sheriff’s Office of San Mateo County, Calif., and even the U.S. Air Force.
Furthermore, C3.ai’s private-sector clients include such corporate giants as Shell (NYSE:SHEL), Consolidated Edison (NYSE:ED) and Raytheon Technologies (NYSE:RTX). With heavy hitters like those on C3.ai’s roster of clients, one might expect the company to generate robust revenue.
And indeed, C3.ai has proven itself in that regard. During the third fiscal quarter of 2023, C3.ai generated $66.7 million in total revenue, exceeding the company’s guidance of $63 million to $65 million.
AI Stock Isn’t Massively Overbought Anymore
I’ll admit, folks who took a share position in C3.ai in early April entered into a crowded trade. If they held on to their stake in C3.ai, they’re surely underwater on their investment now.
You might hear analysts warning financial traders about chasing the rally in AI stock. Yet, that rally is old news by now. The stock has pulled back, thereby allowing new investors to get on board and prior shareholders to reduce their cost basis.
In other words, you don’t have to worry about being a hype-chaser if you choose to invest in C3.ai now. The C3.ai share price is close to where it was in February of this year, before machine-learning mania took over the financial markets. Therefore, don’t hesitate to give C3.ai a chance, as the company deserves a place in your AI-friendly portfolio right now.
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.
