Enterprise artificial intelligence company C3.ai (NYSE:AI) was relatively under-the-radar last year. In 2023, however, C3.ai is the toast of the town – but be careful. You’ll want to mark your calendar for Sept. 6, and refrain from buying AI stock prior to that important date.
Don’t get the wrong idea. I still like C3.ai’s long-term prospects as a company. However, timing is essential in the financial markets.
Even if you’re seeking portfolio exposure to AI in general and C3.ai in particular, be picky and patient, and don’t rush in before a good opportunity presents itself.
C3.ai Is a Clear Winner in the AI Arms Race
Overall, I’m optimistic that C3.ai will continue to thrive in 2023 and beyond. The AI arms race won’t end soon as businesses in practically every industry strive to enhance their operations with machine learning technology.
C3.ai dove headfirst into the red-hot machine learning market this year with the company’s C3 Generative AI Product Suite launch. As generative AI becomes a must-have technology for businesses across market sectors, C3.ai is poised to generate ongoing revenue streams from this trend.
Many analysts recognize this, and they’re responding with favorable reviews of C3.ai. For example, Northland analyst Michael Latimore assigned AI stock a $40 price target, citing C3.ai’s “strong technology heritage and extensive list of blue-chip customers.”
Of course, there’s no bigger and better customer than the government. Thus, it’s great news for C3.ai that the U.S. Air Force has agreed to “adopt a C3 AI air logistics optimization application to conserve flight energy.”
This is a great example of how C3.ai proudly serves a variety of public and private clients seeking AI enhancements.
Don’t Buy AI Stock Before This Date
So far, I’ve made it abundantly clear that C3.ai is a worthwhile tech business to invest in. However, I need to reiterate that good timing is essential to successful stock trading.
Therefore, I don’t recommend buying AI stock prior to Sept. 6. That’s when C3.ai plans to disclose its financial results for the first quarter of fiscal 2024 (which ended July 31, 2023).
You may recall that the C3.ai share price dropped 20% after C3.ai released its previous quarterly results and outlook. Investors probably weren’t happy to hear that C3.ai anticipates an adjusted earnings loss of $50 million to $75 million for the full fiscal year ending in April 2024.
For the full fiscal year, C3.ai only expects its sales to increase 11% to 20% year over year. Hence, financial traders shouldn’t assume that C3.ai will post a huge sales jump in the soon-to-be-reported quarter.
AI Stock: Just Wait a Little Longer
C3.ai disappointed investors with its previous quarterly report, and the shareholders took a haircut. This is what can happen when a sector like AI, and a company like C3.ai, is the focus of hype in the financial markets.
It’s fine to be optimistic about C3.ai as the company has a range of high-net-worth clients, including the U.S. government. At the same time, don’t rush into a hasty trade with AI stock.
The market’s response to quarterly earnings events can be unpredictable. Consequently, I recommend waiting just a few more days, until after Sept. 6, before taking a share position in C3.ai.
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.
