| | | C3.ai: Value And AI In The Same Package (Rating Upgrade)
Summary- I'm upgrading C3.ai to a strong buy with its most recent fall, with a price target of $34 (40% upside from current levels).
- The company's YTD losses stretched to ~20% in September, as investors criticized the company maintaining its full-year outlook.
- C3.ai's expected 19-27% y/y growth this year, however, represents meaningful acceleration from just 16% growth in FY24, a strong indicator of AI tailwinds.
- The company is also enjoying tremendous government momentum as well as quick sales cycles, especially with a new-gen AI product intended specifically for the public sector.
- Trading at just ~6x current-year revenue, C3.ai's valuation sits well below AI peers and is a rare combination of AI-driven growth and value.
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