C3.ai (NYSE: AI) stock jumped 23% yesterday on the release of preliminary financial results for the quarter. Full results will be at the end of the month. Those results were a beat of expectations: “C3.ai (AI) generated revenue between $72.1M and $72.4M for the period ending April 30, exceeding the $71.1M estimate from Wall Street and the company's own guidance. In addition, the company said it generated between $28.1M and $29.5M in net cash from operating activities, while free cash flow for the period was between $18M and $19.4M. On an adjusted basis, it lost between $23.7M and $23.9M from operations, exceeding its guidance.”
As we continually point out around here the current price of a stock is the average of expectations about what the future holds for that stock. All rhe information we've got is incorporated into that price. So, to change the price we need to have new news. Like, say, that the company exceeds expectations in its results. Which is exactly what has just happened here and so the rise in the AI stock price
C3.ai stock price from NASDAQ
We've noted previously that there was a significant C3.ai short selling report recently. One of the major complaints there was that matters are not being properly audited. We have no idea whether that's true - or not - but it will make those results at the end of the month interesting reading. Whether there will be any major changes from these unaudited ones. For if there are that would validate a certain set of the short selling complaints. And the short position is substantial, up at 32% of total issuance. Whether these results are a rejection of that short set of thoughts is something we'll find out a little further down the road.
Wolfe Research has been down on the stock recently. As we also noted: “Well, OK, analyst reports and all that but it is new information to feed into the pricing mechanism. As to why they were worried, this is something that we've seen at NCC and Shearwater, also mentioned by Darktrace. Lots of people are very interested in AI, cybersecurity and so on. But actually getting them to sign on the dotted line and part with their money is becoming ever more difficult. Deals are discussed, yes, but deals closed not so much. “
This is directly addressed by C3.ai: “the company said enterprise AI activity is more than the company has seen since its inception and "seems to be accelerating," as it closed 43 deals during the quarter, including 19 pilots.”
Well, maybe, right? And we'll see when we see the full results.
