Bears have been the AI stock’s most vocal critics since it went public.
Artificial intelligence (AI) stocks may be all the rage right now, but that doesn’t mean they weren’t on investors’ radar a few years ago. C3.ai (AI 3.50%)For example, made its stock market debut with an initial public offering (IPO) in December 2020. AI enterprise software shares fell more than 7% on its first day of trading but quickly rebounded, soaring 50% over the remainder of 2020.
However, investors who have committed to holding onto C3.ai shares since the IPO have not benefited from the recent surge in AI stocks, and indeed there is still a long way to go before early shareholders can view their investment in C3.ai as profitable.
Since 2021, everything has been going downhill
C3.ai hit an all-time high when it first went public. On December 22, 2020, C3.ai’s stock closed at $177.47, but has not reached that mark again since. The next day, it rose to a high of $183.90. The stock has never risen this high since. Although the company’s sales have grown, its net loss has widened and its operating cash flow is negative. These financial trends are causing investors to rate the company’s stock more critically.
AI Revenue (Annual) data from YCharts.
Early investors in C3.ai faced huge losses on their initial investments, with the stock price dropping nearly 74% from its first day of trading. If you’re celebrating the third anniversary of owning $10,000 in C3.ai stock, the losses won’t hurt as much. But you’re left with only $3,913 from your original investment.
Is buying this artificial intelligence stock a smart choice now?
Smart investors know that investing in growth stocks like C3.ai comes with long-term volatility. So those considering C3.ai as a way to gain exposure to AI shouldn’t dismiss the stock because of its past performance, especially since there’s reason to believe the stock could soar again. But those who are more cautious might want to consider other leading AI stocks instead.
