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C3.ai stock rocketed higher following its latest quarterly report.
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C3.ai’s generative AI solutions are gaining traction among both federal government and commercial customers, suggesting future growth.
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C3.ai’s attractive valuation is a solid reason to buy the stock right away.
Share prices of C3.ai (NYSE: AI) gained more than 20% in the May 29 trading session following the release of the company’s fiscal 2025 fourth-quarter results the afternoon prior. That should not have been surprising, as the enterprise artificial intelligence (AI) software provider has been capitalizing on the fast-growing adoption of this technology by both commercial and government customers.
The company was well-placed to deliver stronger-than-expected results for the quarter (which ended on April 30), and that’s precisely what happened: Its top and bottom lines were better than analysts’ consensus estimates.
Let’s look at the reasons why C3.ai stock is on fire right now and check why it may be a good idea for investors to buy it right away.
C3.ai booked $389 million in revenue in its fiscal 2025, an increase of 25% from the previous year. Management forecasts an increase of 20% in the current fiscal year at the midpoint of its guidance range. While that points toward a slower rate of growth, there is a strong possibility that C3.ai will end up delivering faster growth than that this year.
That’s because the company’s generative AI software solutions have gained impressive traction among customers, which is evident from the contracts that it has been signing of late. C3.ai announced that the U.S. Air Force has signed an incremental contract worth $350 million. The updated contract — worth a total of $450 million — runs through October 2029, with C3.ai providing an AI-powered predictive maintenance platform for monitoring components in real time across several types of aircraft.
It is worth noting that C3.ai closed 51 agreements with government customers last year and also expanded its existing deals with current customers, which include the Army and the Navy. Meanwhile, the company’s strategy of offering its generative AI applications through cloud computing giants such as Microsoft, Amazon, and Alphabet‘s Google is also paying off. It closed a total of 193 agreements through its partner channel, an increase of 68% from the preceding year.
Even better, C3.ai points out that its 12-month potential sales pipeline through its cloud partner network has increased by 37%, suggesting that it is likely to land more business in the future. Also, its generative AI solutions were in the initial deployment phase at 36 customers at the end of the previous quarter. Given that C3.ai’s customers tend to expand their partnerships with the company over time, it won’t be surprising to see these clients boost the size of those contracts beyond what the initial deployments called for.
