C3.ai, Inc. (AI): Artificial Intelligence Stock’s IPO Performance

C3.ai Inc. (NYSE:AI), founded by Thomas Siebel in 2009, started its journey as an energy management company. It initially used to offer software for managing carbon emissions. However, the company expanded its product offerings over the years under the leadership of Siebel. A wide range of customers from different industries currently use its AI-based software platform for energy management, predictive analytics, fraud detection, and inventory management, among other uses. Its customers and partners include some of the notable companies and government institutions such as 3M, Microsoft, Royal Dutch Shell, AstraZeneca, and the U.S. Air Force.

Siebel has said on multiple occasions that he founded C3.ai for meeting the software technology needs of the modern world and help organizations solve complex issues. The company estimated its total addressable market (TAM) at $174 billion last year. It expects its TAM to increase to $271 billion by 2024, as many businesses will be seeking technologies that can reduce the lengthy and complex processes of carrying out a certain task.

C3.ai went public last month by raising $651 million. It sold around 15.5 million shares priced at $42 per share, above its expectations in the range of $36 to $48 per share. Its stock value more than doubled on the very next day after its IPO. The stock posted massive gains during the first two weeks and touched a new high of $177.47 on December 22.

However, C3.ai shares have been trading lower since then. Its share price plummeted more than 13 percent on the first trading day of 2021. The drop came after several research firms started coverage on the artificial-intelligence company. For instance, Morgan Stanley recently issued an “Underweight” rating for the stock, with a price target of $100 per share. On the bright side, Wedbush issued an “Outperform” rating for C3.ai with a price target of $200 per share.