C3.ai Just Landed a Big Win – So Why Is Morgan Stanley Still Bearish?

We recently published a list of 10 AI Stocks on Wall Street’s Radar. In this article, we are going to take a look at where C3.ai Inc. (NYSE:AI) stands against other AI stocks on Wall Street’s radar.

On May 29, Morgan Stanley analyst Sanjit Singh raised the price target on C3.ai, Inc. (NYSE:AI) to $22.00 from $20 while keeping an “Underweight” rating.  C3.ai, Inc. (NYSE:AI) is an enterprise artificial intelligence (AI) software company involved in building and operating enterprise-scale AI applications and accelerating digital transformation.

The rating reiteration follows C3.ai’s recent partnership extension with Baker Hughes for an additional three years, along with the company’s reported revenue growth of over 26% in the fourth quarter.

On May 28, C3 and Baker Hughes announced a multi-year renewal and expansion of their joint venture agreement, where the two companies will continue to provide Enterprise AI solutions to the oil and gas and chemical sectors.

A computer engineer debugging a complex AI application on a powerful workstation.

Discussing these positive developments, Morgan Stanley noted that

” a 3-year extension of the Baker Hughes partnership and sustained +26% rev growth in Q4 likely qualifies as a better than feared outcome.”

At the same time, the firm also pointed out some concerns regarding the stock. It stated how the company’s long-term growth prospects are questionable since its revenue missed expectations slightly. Moreover, the revenue mix included a high proportion of demonstration licenses and services revenue.

Overall, the firm is cautiously optimistic due to the company’s performance indicators.

“However, a sub rev miss along with a high mix of demonstration licenses and services rev keeps the debate open on the durability of LT growth.”

Overall, AI ranks 10th on our list of AI stocks on Wall Street’s radar. While we acknowledge the potential of AI as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than AI and that has 100x upside potential, check out our report about this cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.

Disclosure: None. This article is originally published at Insider Monkey.