Why We Should Not Overlook C3.ai Rapid and Consistent Revenue Growth

C3.ai customer base covers both private-sector and public-sector, there have been a lot of talks on AI-enhanced security, if C3.ai can deliver this to more of their public-sector clients, then we could see C3.ai revenue grow more rapidly.

I personally think that we should not give up and lose sight of C3.ai price targets in 2024. Especially, we are expecting C3.ai to post their quarterly earnings on the 29 May 2024 after market close.

In this article, I would like to share where are the areas we could look at for revenue streams for C3.ai, and how the technicals are showing for C3.ai before and after its earnings.

C3.ai has recently team up with Paradyme for an enhanced partnership to deliver AI solutions for federal U.S. intelligence agencies. Paradyme is a technology-solutions company that will “accelerate” its “joint selling and delivery efforts” to the government in this collaboration.

In this partnership, C3.ai will bring its public-sector-focused products to the table. These include the C3 AI Defense and Intelligence Suite as well as C3 Generative AI for Defense and C3 AI Law Enforcement. This move should be seen as positive and a concerted effort to ramp up its federal business. Paradyme could leverage its government connections, while C3.ai can provide the software solutions. Ultimately, this could be a win-win as federal contracts can be quite lucrative.

If we looked at the news of this enhanced partnership since its announcement on 27 March 2024, it was trading downside, and manage to create Buying opportunity on the 19 April, before raising back to the 27 March 2024 level.

Yet recently we saw it is trading on the downside again, this could be due to the market sentiment that focus is on AI chip makers and the cloud service providers who are buying up these chips.

But there is something we need to understand that Generative AI is maturing already, and it is now into the inference phase (which mean how to get the solutions to end-users, or consumers). So I personally think that C3.ai approach to beef up the partnership for its Federal clients is a wise move.

We could be seeing more partnership coming up later as well.

As mentioned above, we could see that even though there is a decline, it is a short span, similarly, we are also seeing a short span of uptrend. So it is interesting how market are quickly forgetting C3,ai impressive progress in its earnings.

In the first quarter of fiscal 2024, C3.ai grew its revenue 10.8% year over year (YOY) from $65.308 million to $72.362 million. Then, the company increased its revenue by 17% YOY to $73.2 million in the second quarter. After that, C3.ai expanded its revenue by 18% YOY to $78.4 million in fiscal 2024’s third quarter.

Short-term traders are always looking for the next shiny object, and C3.ai is not the shiny object right now. I believe this explains why C3.ai stock trade close to $24 recently. The market has a short attention span and has already forgotten about C3.ai’s consistent revenue growth.

In the third quarter, C3.ai CEO Thomas Siebel reported that customer engagement grew 80% YOY. “Our significant first mover advantage in Enterprise AI is generating tailwinds as market interest in adopting AI accelerates,” Siebel commented.

So could we be seeing interest coming back from traders and investors ahead of its upcoming earnings?

If I looked at the buying/selling strength, C3.ai selling period might be over soon, but in order to see a proper upwards movement, we would need MACD to form a crossover. This might happen when trading open tomorrow (28 May 2024) after the holidays.

I am hoping that when C3.ai releases its next quarterly financial report on 29 May 2024, market would remember how this stock have been growing their revenue rapidly and consistently. But for now, I believe as investors we could take advantage of how the price target might move.

No doubt the market’s short attention span would cause investors to overlook C3,ai, I do not want to be one of them.

Based on what I have seen from my supertrend indicators, the first TP (Target Price) is around $37, and the highest we are looking at around $49 to $50. So as a forward-thinking investor, I would take the current price around $24 to be a buying opportunity, but I would check on other indicators for confirmation when trading start.

I would think C3.ai could have a bullish upside move after its earnings.

C3.ai has positioned themselves and also making the effort to partner for customer acquisition. Their products would need to be tested by more commercial customers. But their enhanced partnership with Paradyme should bring some growth in their revenue.

Appreciate if you could share your thoughts in the comment section whether you think C3.ai is in a better position to post a significant revenue growth and we should see a positive price effect in its stock price after its earnings report?

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.