Can C3.ai Become the Next Palantir Technologies?

Core Insights - C3.ai is positioned to capitalize on the growing AI software market, potentially following in the footsteps of Palantir, which has seen significant stock gains [1][2] - Both C3.ai and Palantir reported similar growth rates, with Palantir's revenue increasing by 30% year-over-year to $726 million in Q3 2024, while C3.ai's revenue also showed strong growth [3][10] - C3.ai's sales multiple of 13 is significantly lower than Palantir's, making it an attractive option for investors seeking value in the AI sector [4][5] Company Performance - Palantir's stock has surged 380% in 2024, but it trades at a high price-to-sales ratio of 75 and a trailing earnings multiple of 412, indicating a rich valuation [5][6] - C3.ai's revenue for fiscal 2025 Q2 was $94 million, reflecting a 29% year-over-year increase [8] - Analysts expect both companies to report a 25% increase in revenue for the current fiscal year, with Palantir projected to reach $2.79 billion and C3.ai expected to generate $388 million [10][11] Market Opportunity - The AI software platforms market generated $28 billion in revenue in 2023 and is forecasted to grow to $153 billion by 2028, indicating substantial growth potential for both companies [7] - C3.ai has secured new agreements with various branches of the U.S. military, enhancing its growth prospects [9] - Both companies are increasing their full-year revenue guidance due to rising demand for generative AI software solutions [14][16] Strategic Partnerships - C3.ai has partnered with major cloud service providers like Microsoft, Amazon, and Google to expand its reach and offer over 100 enterprise AI applications [15] - The company provides an enterprise AI application development platform, allowing customers to create tailored solutions [15][18]