C3.AI did little to differentiate itself among an increasingly crowded space of artificial intelligence stocks at the company’s investor day, according to Deutsche Bank. The bank on Friday reiterated a sell rating the stock, with a $16 per share price target. Deutsche Bank’s forecast calls for a 57% drop over the next 12 months. C3.AI has surged 234% year to date as investor hype over artificial intelligence lifted the entire sector. But Deutsche Bank analyst Brad Zelnick said it isn’t clear at this point in time how the company will stand out and added that the investor day held earlier this week only provided “somewhat limited incremental updates.” AI YTD mountain C3.AI has been on an impressive run since January tied to investor excitement over artificial intelligence. “While we appreciate the vast opportunity presented by AI, the event did nothing to ease our skepticism on the true differentiation of the company’s platform, its traction with customers or its ability to hit its constantly evolving financial targets,” Zelnick said. “Until we get more comfort in some of the leading indicators, magnitude of new deals and signs of sustained new business traction we maintain our Sell rating, especially with valuation at ~13x EV/FY25E rev.” Meanwhile, Zelnick added that C3.AI’s primary focus on the generative AI space and appeal to artificial intelligence businesses — essentially aggregating data into a central database while also helping limit so-called large language model hallucinations— may not even be deemed necessary by peers. Hallucinations generally refers to false information, content or facts provided by AI. “In our view, there is still much to be settled in what the final state of Gen AI architectures look like and if companies will ultimately want or need a platform like C3 vs. the wide range of solutions coming from hyperscalers, direct competitors like Palantir, other ISVs and/or the open source community,” he said. Zelnick wasn’t the only Wall Street analyst skeptical of C3.AI going forward. Morgan Stanley’s Sanjit Singh reiterated his underweight rating on the stock, noting that, while AI enthusiasm is leading to “Top of the Funnel Momentum,” it’s uncertain when the company can see a growth inflection point. Meanwhile, Joshua Tilton of Wolfe Research maintained an underperform rating on the stock, noting: “At the end of the day, with no incremental financial targets, the A-Day itself was not enough to move shares higher or deter us from our thesis.” — CNBC’s Michael Bloom contributed to this report.
