C3.ai Could Be The Next Big AI Winner — Thanks To Big Tech Ties, Profit Push
The ongoing transformation in the artificial intelligence landscape is creating new opportunities for investors, particularly in the small-cap sector. C3.ai‘s (NYSE:AI) recent recognition by WestPark Capital as a “Buy” signal a shift in market sentiment, highlighting the company’s potential to emerge as a leader in enterprise AI.
Analyst Curtis Shauger initiates coverage with a price target of $40 and notes that C3.ai presents a rare small-cap opportunity in the AI sector.
He sees potential for significant stock upside as the company approaches profitability within the next 12–18 months.
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Shauger believes that as an early leader in enterprise AI, C3.ai has absorbed the high costs of educating the market, similar to what companies like Salesforce, Inc. (NYSE:CRM) faced in SaaS's early days.
While the company's five-year CAGR of 18% trails Palantir Technologies Inc. (NASDAQ:PLTR) 31%, Shauger highlights that C3.ai is among the few enterprise software firms to show accelerating growth over the last 7–8 quarters.
If the company sustains this positive trend, investor sentiment could shift sharply in its favor.
The analyst also notes that the company's growing partner network is helping it broaden its reach and improve efficiency.
Since its IPO, C3.ai has added major players like Microsoft Corporation (NASDAQ:MSFT), Alphabet Inc. (NASDAQ:GOOG) (NASDAQ:GOOGL), and Amazon.com, Inc. (NASDAQ:AMZN) to its indirect sales ecosystem, reducing its earlier reliance on oil and gas clients, particularly its partnership with Baker Hughes (NASDAQ:BKR).
Shauger believes these alliances can play a crucial role in helping the company scale and move closer to profitability over the next 12 to 18 months.
He further suggests that a move toward profitability could drive a strong valuation boost.
The analyst's $40 price forecast assumes an 8x multiple on calendar year 2026 revenue of $598 million, which could be achievable if the company turns profitable.
C3.ai currently trades below its historical median valuation, yet shows encouraging momentum driven by a growing number of high-profile partnerships.
Price Action: AI shares are trading higher by 3.3% to $27.26 at last check on Wednesday.
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