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Amazon, Microsoft, and Alphabet have partnered with this AI stock. is that buy?

Artificial intelligence (AI) is a rapidly advancing technology, thanks to companies such as: C3.ai (AI 1.93%), is gradually becoming accessible to all companies in all industries. The company is blazing a trail in a whole new field called enterprise AI. It sells off-the-shelf, customizable AI applications to customers who want to enhance their operations.

Estimates suggest that by 2030, up to 70% of all organizations will implement some form of AI, adding $13 trillion to the global economy. This is a huge opportunity for companies like C3.ai, which already have a leading position in the industry.

The world’s largest technology companies have established partnerships with C3.ai. Amazon, microsoftthe parent of Google alphabet, verifies the quality of what the company is building. This is one of the reasons why investors should consider holding his C3.ai shares. Especially since it’s now 90% down from its all-time high and is now priced attractively.

C3.ai is expanding access to artificial intelligence

C3.ai just reported financial results for the first quarter of fiscal 2023 (ending July 31), during which its customer base grew 27% year-over-year to 228 companies. These companies operate in at least 11 different industries, from technology to financial manufacturing, highlighting the diversity of C3.ai’s AI applications.

A prime example, C3.ai’s technology is very popular with oil and gas giants looking for advanced AI to help them run clean operations. C3.ai helps you reduce your carbon footprint and predict catastrophic equipment failures to prevent catastrophic environmental disasters.world oil giant shell monitors over 13,000 devices through C3.ai and uses 1.2 million data streams daily.

Technology leaders Amazon, Microsoft, and Alphabet are all working with C3.ai to build broad cloud service segments. Given the rapid shift of many businesses to online operations, the cloud has become a key facilitator, with a race among providers to offer the most impactful solutions. Specifically, one of C3.ai’s roles in Google Cloud is to help small and medium-sized businesses adopt AI faster and extract the most value from their AI applications.

At this time last year, C3.ai and Microsoft closed a combined deal of over $200 million for the Azure cloud platform. Their partnership continues to grow, signing 16 new co-sells in the first quarter.

C3.ai stock is cheap now

Investors dropped C3.ai’s share price by 15% in after-hours trading after reporting first-quarter results. They appeared disappointed with the company’s forward guidance for the full fiscal year 2023. This implied that revenue could only grow by 7% compared to fiscal 2022. large contract.

Still, the company’s quarterly revenue grew 25% year over year to $65 million. Additionally, we are moving from subscription-based pricing to a consumption-based pricing model, fine-tuning our sales and partnership model in a move designed to accelerate growth. will be accelerated and the market share will increase over time.

The company is not yet profitable. This is because we continue to invest heavily in business expansion. That’s the right thing to do, given the rapid growth in revenue and customer base in the short term. However, this kind of strategy is currently not generally popular with investors. , due to low risk appetite. Losing $71.8 million in the first quarter, the net loss for fiscal 2022 reached $192 million. But with more than $900 million of his cash, equivalents, and short-term investments on C3.ai’s balance sheet, he can afford to spend aggressively for now.

C3.ai currently has a market capitalization of just $1.65 billion. This means that the investor is valuing the business at only $750 million in net cash. That’s just three times the sales in 2022. Given the blockbuster partnerships and customer relationships C3.ai has already amassed, in addition to estimating the opportunity could be worth his $596 billion by 2025, the company estimates that This could be a great opportunity for investors to take a long-term position.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Alphabet executive Suzanne Frey is a member of The Motley Fool’s board of directors. Anthony Di Pizio has no positions in any of the mentioned stocks. The Motley Fool has positions in and recommends Alphabet (A shares), Alphabet (C shares), Amazon, and Microsoft. The Motley Fool recommends C3.ai, Inc. The Motley Fool’s U.S. headquarters has a disclosure policy.

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