Hedge funds have a reputation for outperforming average market returns, which is why it is crucial to monitor their stock transactions. By using TipRanks’ hedge fund trading activity tool (which uses Form 13-Fs data to provide hedge fund signals), C3.ai (NYSE:AI) is proving to be a stock these experts prefer. C3.ai is an enterprise AI application software company.
With that in mind, let’s explore the future of this AI stock.
Hedge funds accumulate C3.ai shares
AI-driven tailwinds bode well for C3.ai. During the second quarter conference call, management emphasized that interest in AI applications, particularly generative AI, is increasing significantly. Additionally, the company’s transition from subscription to usage-based pricing will help with revenue predictability, which is positive.
The hedge fund signal remains very positive for AI stocks. Data from TipRanks shows that hedge funds bought 545,000 AI stocks in the last quarter, with Philippe Laffont of Coatue Management and John Hussman of Hussman Strategic Advisors, among others, increasing their holdings of AI stocks.
Is C3.ai a good stock to buy?
While hedge funds favor C3.ai stock, lengthening the selling cycle and extending losses remain an obstacle. Wall Street analysts remain sidelined on AI stocks, with Needham analyst Mike Cikos reiterating his Hold recommendation on Dec. 7. Cikos said the unchanged revenue guidance despite solid demand and “larger operating losses” will “serve as an overhang for AI stocks.”
Overall, there are three buy, six hold and three sell recommendations for a consensus rating of “Hold” for C3.ai shares. Additionally, AI stock’s average price target of $28.50 suggests it has the potential to rise 9.53% from current levels.
C3.ai is a solid AI play with a very positive signal from hedge funds. However, Wall Street analysts are left out of their assessment of the stock. This suggests that retail investors should avoid making judgments based solely on a few metrics. Instead, investors can use TipRanks’ Experts Center tools to make informed investment decisions.