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Bullish on the prospects for enterprise-focused generative AI search software, D.A. Davidson analyst Gil Luria initiated coverage of C3.ai stock with a Buy rating.
Dreamstime
The
C3.ai
rally rolls on Friday morning, as interest in the artificial-intelligence software company gets some juice from a new analyst recommendation.
C3.ai stock (ticker: AI) is 13% higher Friday to $24.87, bringing the year-to-date gain to 117%. The company went public in January 2020 at $42 a share.
Founded by enterprise software pioneer Tom Siebel, C3.ai provides AI application software to enterprise clients—oilfield-services company
Baker Hughes
(BKR) is by far C3.ai’s single largest customer. The company is obviously benefiting from an investor search for plays on AI, given the growing fascination with ChatGPT, a software tool from the start-up OpenAI that allows the use of conversational language to make queries to large databases
Sparking new investor interest in the stock, the company earlier this week unveiled plans for C3 Generative AI for Enterprise Search, a new software tool which will leverage a variety of software tools—including OpenAI’s ChatGPT—to make it easier to find information on corporate information systems.
D.A. Davidson analyst Gil Luria, in a research note Thursday, picked up coverage of the stock with a Buy rating and $30 target price.
“We believe that C3.ai is a truly scarce asset in a critical software arena and that the emergence of generative AI as a ‘killer app’ for Artificial Intelligence provides C3.ai with the opportunity to monetize its considerable investment and track record in the field of Artificial Intelligence,” Luria writes.
He adds that he thinks the new generative AI search tool will be “a game changer for the company.”
(By the way, Luria—or was it actually Luria?—writes in the notes he “incorporated use of the generative AI tool ChatGPT into the authoring of this initiation.”)
Luria adds that he thinks C3.ai is “well positioned to deploy generative AI solutions,” which he describes as “the most impactful technology in years.” While he notes that the opportunity here might be bigger for
Microsoft
(MSFT), which is a major investor in OpenAI, he adds that as a pure play, there may be a bigger potential payoff in C3.ai shares.
C3.ai is leveraging technology from OpenAI,
Alphabet
‘s (GOOGL) Google and others to build its generative AI search tool. Luria considers that approach an advantage.
“C3.ai’s ability to stay platform-agnostic should play a critical role in its generative AI prospects,” he writes. “Just as the company has been able to deploy its current generation of products across the main hyperscalers, often leveraging them as a channel, we believe C3.ai can use the same approach to leverage the progress made by OpenAI, Google,
International Business Machines
(IBM), and others to deliver its solutions.”
Write to Eric J. Savitz at [email protected]
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