In the latest segment of Cramer’s Mad Dash, C3.ai faced skepticism from analysts regarding its inconsistent subscription business and disappointing billing numbers, despite CEO Tom Siebel’s attempts to present a positive outlook. Cramer highlighted the polarized market for AI stocks, contrasting C3.ai’s struggles with GitLab’s recent success, and emphasized the need for careful evaluation of investments in this rapidly evolving sector.
In the latest segment of Cramer’s Mad Dash, the focus is on C3.ai, a company that once gained significant attention as a meme stock and was perceived as a leading player in the artificial intelligence (AI) sector. However, recent developments have led to skepticism about its viability as an investment. The CEO, Tom Siebel, appeared on a recent call with Jon Fortt, where he attempted to present a positive outlook for the company. Despite his efforts, concerns arose regarding the company’s subscription business, which has shown inconsistent performance, leading to questions about its overall financial health.
During the call, analysts expressed their doubts, particularly regarding C3.ai’s billing numbers, which have not met expectations. Cramer noted that the analysts were combative, challenging Siebel’s optimistic rhetoric in light of the company’s sequential decline in billings. This situation created a tense atmosphere, as Siebel, an experienced leader, struggled to reassure investors amidst the negative feedback. Cramer acknowledged Siebel’s capabilities but described the call as painful, highlighting the disconnect between the company’s performance and its leadership’s messaging.
Cramer speculated that the disappointing call could lead to downward revisions in analysts’ estimates for C3.ai. He pointed out that the market is currently in a phase of scrutiny, especially following NVIDIA’s recent performance, which has caused investors to reevaluate any company associated with AI. This heightened skepticism has made it challenging for companies like C3.ai to maintain investor confidence, particularly when their financial results do not align with their ambitious narratives.
In contrast, Cramer mentioned GitLab, which recently reported strong AI-related numbers and saw a significant increase in its stock price. This comparison illustrates the varying fortunes of companies within the AI space, as investors are increasingly discerning about which firms can deliver on their promises. The market’s reaction to AI stocks has become polarized, with some companies thriving while others struggle to gain traction.
Looking ahead, Cramer referenced an upcoming earnings call from Broadcom, where an analyst suggested buying the stock ahead of the announcement. He expressed a desire for this analyst to have a better track record, as he had previously recommended buying into NVIDIA’s July quarter print, which did not yield favorable results. Cramer concluded by emphasizing the importance of careful evaluation in the current market climate, particularly for companies involved in AI, as investors navigate the complexities of this rapidly evolving sector.