March 3 (Reuters) – Shares of artificial intelligence-based (AI) product makers zoomed in on Friday as a strong forecast from retail darling C3.ai Inc (AI.N) reinforced a continued euphoria in the segment driven by the launch of OpenAI’s ChatGPT .
C3.a1 forecast better-than-expected revenue and earnings for both the fourth quarter and fiscal year 2023 after third-quarter results beat Wall Street estimates.
Shares of the AI software vendor were up 16% to $24.80 and were among the top five trending stocks on StockTwits. If the gains hold, the stock will record its strongest one-day gains in a month.
“The company is beginning to gain momentum in building significant business opportunities in its pipeline with its suite of innovative enterprise AI solutions,” said Wedbush analyst Daniel Ives.
The company’s goal of turning cash positive and adjusted profitable by the end of fiscal year 2024 also boosted the stock, but Ives believes executing on these ambitions is key to regaining Street’s confidence heading to 2023.
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Private investors have flocked to small-cap companies building AI tools as companies such as Google parent Alphabet Inc (AAPL.O) and Microsoft Corp (MSFT.O) have clamped down on making AI the next big growth engine. to make.
Microsoft’s investment in OpenAI’s ChatGPT has further increased the popularity of AI companies. Chatbots like the ChatGPT are software applications that aim to mimic human conversations using artificial intelligence.
Other major AI stocks also rose on Friday with BigBear.ai (BBAI.N), conversation intelligence company SoundHound AI (SOUN.O) and Thai security firm Guardforce AI (GFAI.O) rising between 5% and 20%.
So far this year, these stocks, including C3.ai, are up 33.9%-321.6% from the previous day’s closing price.
“AI could become the new gold rush on Wall Street,” said Adam Sarhan, CEO of Florida-based 50 Park Investments.
“But it needs a little more time to mature, better price action, and prove it can generate returns for investors.”
Reporting by Ankika Biswas in Bengaluru; edited by Uttaresh Venkateshwaran
Our Standards: The Thomson Reuters Principles of Trust.
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