C3.ai skyrocketed earlier this month. Although AI stock has risen, it is well below its all-time high of 183.90, which it reached in Dec. 2020.

AI users successfully started using artificial intelligence app ChatGPT to generate answers, texts, emails and even books. AI stock stands to benefit from applications like ChatGPT.

C3.ai provides enterprise AI, which comprise applications for businesses but not consumers. But the company stands to benefit from consumer apps like ChatGPT because the code can be integrated into the C3.ai platform.

ChatGPT app reached 100 million monthly active users in two months. beating earlier popular apps like Tik-Tok and Instagram. Made by Microsoft project OpenAI, ChatGPT uses natural language to helps users write emails, develop codes and finds answers for daily questions.

C3.ai makes AI-enabled software applications that can be configured for different purposes. The software can make networks more reliable, detecting fraud, balancing inventory and demand, solving supply chain issues, increasing energy efficiency, helping with anti-money laundering and customer interfacing.

C3.ai products are also valuable adds to enterprise CRM systems where automation can reduce cost and errors.

AI Stock Shows Sales Growth

The company has a decent record of sales growth.

In the third quarter, sales rose 7% to $62.4 million but the company still lost 11 cents per share. Recent IPOs carry greater risk since they do not have sales track records, unlike older companies. So, while AI stock has had a good run of sales growth for eight quarters since it went public, it is a riskier stock to hold.

Technical Ratings

AI stock popped on the first day of public listing in December 2020, opening at $42 per share.

The stock rose from 11.19 in Q4 2022 to 30.92 earlier this month, surging over 150% in less than two months. It has a Composite Rating of 78 that falls a shade below the desirable level of 80. The low 54 EPS Rating clearly weighs on the Composite Rating. However, the 96 Relative Strength Rating speaks for itself, highlighting outperformance compared with other stocks in the IBD data base.

The stock also boasts a top-notch "A" Accumulation/Distribution Rating, even though mutual funds own only 36% of shares, according to IBD MarketSmith chart analysis.

Investors looking for an entry should wait for a proper base that can set up a sustained rally.

AI Stock News

C3.ai's Generative AI for Enterprise Search general release, a part of the C3.ai Generative AI Product Suite, will launch at the C3 Transform international users' group conference on March 7. The product will draw on new AI tools and capabilities from leading platforms, including OpenAI, Google and others. The new iteration will be able to host ChatGPT and GPT-3.

Earlier, the company got a $90 million deal from the U.S. Department of Health and Human Services for data collection, analysis and predictive AI tools.

The generative artificial intelligence feature of C3.ai products holds promise for governments and enterprises that are trying to build accurate solutions for complex problems at lower costs.

But that promise calls for a lot of upfront spending. At the same time, the AI market size is gigantic and growing. The value of the global artificial intelligence market is expected to hit $387.45 billion in 2022 and surge to $1.39 trillion by 2029--a huge opportunity.

AI stock has rallied with growing interest in generative artificial intelligence. The stock is one to watch as more companies outsource their automation needs for complex processes.

According to the CAN SLIM investment strategy, stocks with strong records of sales and earnings growth that offer clear buy points from bases are sound picks. Clearly, AI stock has some work to do before it offers a solid entry.

To find the best stocks check out IBD Stock Lists and IBD Data Tables.

Please follow VRamakrishnan on Twitter for more news on AI stock.

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