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C3.ai Analysis: AI and OKTA Stocks Rise as Snowflake Wobbles in Volatile Session for the Software

  • C3.ai shares rose nearly 25% on Thursday.
  • The artificial intelligence platform increased its subscription revenue and raised its prospects.
  • Okta was also up more than 22% in an impressive quarter.
  • Snowflake did not fare as well and fell more than 18%.

The actions of C3.ai (AI) They advanced 24.5% on Thursday, closing just below $37, after the data platform company posted fiscal third-quarter results that beat Wall Street estimates. Subscription revenue rose enough to earn analyst approval, and AI shares soared to levels not seen since August 2023. Shares fell 1% after the market closed.

Okta (OKTA), the maker of customer identification software, also saw its share price rise following a strong earnings release. Adjusted earnings beat expectations by 25% and revenue of $605 million beat consensus by more than $17 million.

Snowflake (SNOW), however, was the biggest loser in a day of great volatility for software companies, with a drop of 17%. The much-hyped company suffered from management changes, as well as fiscal 2025 revenue guidance that came in at a 22% growth rate, well below the 38% growth rate in fiscal 2024. .

The Nasdaq led the gains on Thursday, closing up 0.9%. The S&P 500 was a little more stable, up 0.52%, while the Dow Jones only added 0.12%.

C3.ai News

C3.ai continues to offer generous trial periods to many businesses curious about its execution platform for building and launching AI-related applications as well as customer management-oriented software. Still, the company posted fiscal third-quarter subscription revenue of $70.4 million, up from $57 million a year ago.

Overall, C3.ai had sales of $78.4 million, $2.3 million above consensus and up 18% from the previous year. Adjusted earnings per share were $0.13, beating the consensus estimate by about 15 cents.

Wall Street was impressed by the customer acquisition numbers, which increased 80% from the previous year, to 445. It seems that C3.ai is starting to gain ground in the sector.

“Government was a key area of ​​strength, with federal revenues up more than 100%,” Morgan Stanley analysts wrote.

Wedbush Securities raised its price target from $35 to $40 per share.

Management raised full fiscal 2024 guidance from the consensus $305.5 million to a range of $306 million to $310 million, putting the midpoint of fiscal fourth-quarter revenue at $84 million.

Forecast on C3.ai

There are two significant factors in Thursday's rise in C3.ai stock. The first is that AI stock broke above the $32 level. That price level has held since functioning as support in June 2023 before shifting to resistance in the second half of last year. A break and close above that level is key for bulls to determine that a new uptrend is brewing.

Second, Thursday's daily candlestick has continued to rise enough to close well above its opening price. This means that a volatile gap to the upside is not dependent on trader emotion, and that the new price action level likely has staying power.

Traders will note that AI stock is now entering overbought territory on the Relative Strength Index (RSI), but that doesn't mean a pullback is in the cards. Instead, the stock is likely to continue advancing until it reaches more common historical volume levels in the low $40 area. Long-term resistance and a considerable price target is the June 2023 resistance at $48.50.

c3.ai

C3.ai Daily Chart

Source: Fx Street

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