March 3 (Portal) – Shares of makers of artificial intelligence (AI)-based products rose on Friday as a strong forecast from retail favorite C3.ai Inc (AI.N) reinforced ongoing euphoria in the segment, which was powered by the introduction of OpenAIs ChatGPT.
C3.a1 forecast better-than-expected sales and earnings for both the fourth quarter and fiscal 2023 after third-quarter results beat Wall Street estimates.
Shares of the AI software provider rose 16% to $24.80 and was among the top 5 trending stocks on StockTwits. If gains continue, the stock will post its strongest one-day gain in a month.
“The company is beginning to gain momentum with its suite of innovative enterprise AI solutions as it builds significant business opportunities in its pipeline,” said Daniel Ives, analyst at Wedbush.
The company’s goal to be liquid and profitable on an adjusted basis by the end of fiscal 2024 has also buoyed the stock, but Ives believes executing on those ambitions is key to regaining the Street’s confidence by 2023.
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Retail investors are flocking to small-cap companies developing AI tools as companies like Google parent Alphabet Inc (AAPL.O) and Microsoft Corp (MSFT.O) have closed the horns to promote AI as the next big driver of growth close.
Microsoft’s investment in OpenAI’s ChatGPT has further increased the popularity of AI companies. Chatbots like ChatGPT are software applications that aim to mimic human conversations using artificial intelligence.
Other big AI stocks are also up on Friday, with BigBear.ai (BBAI.N), conversation intelligence company SoundHound AI (SOUN.O) and Thai security firm Guardforce AI (GFAI.O) up between 5% and 20%.
This year, these stocks, including C3.ai, are up 33.9% to 321.6% through the previous day’s close.
“AI could become Wall Street’s new gold rush,” said Adam Sarhan, chief executive officer of 50 Park Investments in Florida.
“But it still needs a little more time for something to mature, have better price action, and prove it can generate profits for investors.”
Reporting by Ankika Biswas in Bengaluru; Editing by Uttaresh Venkateshwaran
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