C3.ai action: this AI elevator is still far from being at the top

Is a specialist in enterprise artificial intelligence C3.ai (NYSE:AI) a company to watch in 2024? I would definitely say yes, and investors should put at least a few C3.ai shares in their portfolios for an extra boost to the AI ​​sector. You'll thank me one day when the stock price is significantly higher.

But don't take my word for it. Not long ago, C3.ai passed a crucial test with flying colors as investors questioned whether the company could continue growing revenue. I'm not saying that C3.ai's financials are perfect in every way, so let's start with the bad news before moving on to the really good news about C3.ai.

Can you forgive C3.ai for this?

I'm just going to say it bluntly: C3.ai is an unprofitable company. This might bother some cautious investors, but let's look at the full story before passing judgment.

In the fourth quarter of fiscal 2024, ended April 30, C3.ai reported an adjusted earnings loss of 11 cents per share. That's not a massive loss when the stock is trading at around $30. Plus, when we find out how quickly and consistently C3.ai's revenues are growing, you could forgive the company for not being profitable.

I did, however, observe that C3.ai's cost of revenues and operating expenses increased somewhat in the fourth quarter of fiscal 2024 compared to the year-ago quarter. Hopefully, the company is willing and able to reduce expenses in the current and subsequent quarters.

C3.ai's Incredible Accelerated Revenue Growth

C3.ai CEO Thomas Siebel is a confident spokesperson for the company. He proclaimed that the fourth quarter of fiscal 2024 was C3.ai's “fifth consecutive quarter of accelerating revenue growth.”

Siebel's confidence is therefore perfectly understandable and AI technology is clearly not just a passing fad. Impressively, C3.ai's Q4 FY2024 revenue increased 20% year-over-year to $86.6 million.

Here's the real kicker, though. Surprisingly, C3.ai's subscription segment revenue grew 41% year-over-year to $79.9 million. This is important, since subscription revenue makes up 92% of C3.ai's total revenue.

“Demand for enterprise AI is intensifying,” Siebel said, and the company’s revenue growth appears to prove the CEO’s point. Siebel also observed: “The interest we are seeing in our generative AI applications is astounding. »

C3.ai Stock: Your Best Bet for AI Exposure

Investing in C3.ai is an easy way to directly participate in the AI ​​revolution of the 2020s. At the very least, you'll gain exposure to a company with growing revenues.

The main sticking point for some people might be the fact that C3.ai is not profitable. So, going forward, investors should keep an eye on C3.ai's spending.

That said, it's easy to see why C3.ai's CEO is so confident about the company's growth prospects. Overall, it makes perfect sense to own at least some C3.ai stock this year.

At the time of publication, David Moadel did not hold (neither directly nor indirectly) any position in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to InvestorPlace.com Publishing Guidelines.