Technology

Why Needham Is Calling for 50% More Upside in This AI Stock

C3.ai Inc. (NYSE: AI) only entered the market in early December, and its stock has seen about a 50% run-up since then. Regardless, and despite Monday’s pullback, one analyst believes that there is more than 50% more upside in the stock.

Needham’s Jack Andrews has initiated coverage of C3.ai with a Buy rating and a $193 price target, implying upside of 50% from the current share price. Note that this rating came after the quiet period ended, and as even more analysts are weighing in on the stock.

C3.ai operates as an enterprise artificial intelligence (AI) software company. The company provides software-as-a-service applications for enterprises. The company also offers integrated turnkey enterprise AI applications for various market segments, including oil and gas, chemicals, utilities, manufacturing, retail, banking, financial services, intelligence, aerospace and defense, among others.

In the recent report, Andrews noted:

We are initiating coverage of C3.ai (AI) with a BUY recommendation and price target of $193, based on C3.ai’s unique combination of a highly differentiated/patented platform, an expansive TAM, and a veteran leadership team with a proven track record of rapidly scaling new markets. As organizations apply artificial intelligence to drive digital transformations, they are seeking ways to accelerate application development for AI systems in order to achieve faster time-to-value and scalability across their entire enterprise technology stack. The C3 AI Suite, C3 AI Applications, and the patented model-driven architecture uniquely empower enterprises to accomplish these goals, as the alternative is largely do-it-yourself projects that involve costly complex software engineering and often fail.

Other analysts weighed in, initiating coverage on the stock:

  • Morgan Stanley with an Underweight rating and a $100 target
  • Deutsche Bank with a Hold rating and a $120 price target
  • Canaccord Genuity with a Hold rating and a $140 target
  • JPMorgan as Underweight with an $84 price target
  • Wedbush as Outperform with a $200 price target
  • Merrill Lynch with a Neutral rating and a $170 target
  • Piper Sandler at Overweight with a $166 price target
  • KeyCorp with a Sector Weight rating
  • JMP Securities as Outperform with a $167 target

C3.ai stock traded down 12% to $122.31 Monday morning, with a post-IPO range of $90.03 to $183.90.