Key Points Adobe wants to integrate Semrush's generative AI tools into its product suite. The creative software leader offered to purchase Semrush's shares at a substantial premium to their recent closing price. 10 stocks we like better than Semrush › Shares of Semrush (NYSE: SEMR) soared on Wednesday after the digital marketing platform struck a deal to be acquired by Adobe (NASDAQ: ADBE) for $1.9 billion. By the close of trading, Semrush's stock price was up about 74%. Image source: Adobe. Ado ...

(Bloomberg) — It’s hard not to see “some frothiness in different sectors,” Citigroup Inc. Chief Financial Officer Mark Mason said on the bank’s third-quarter earnings call in response to a question from a reporter about artificial intelligence. “I feel good about our business and our ability to cover clients,” he went on. “But it’s hard to look at how equity valuations and multiples sit today and not think there are some sectors that are likely frothy and overvalued. But we’ll see how those play out over ...

Core Viewpoint - C3.ai has underperformed in the AI sector, with its stock down approximately 22% over the past year and around 86% from all-time highs, primarily due to struggles in growth and profitability [1][2]. Company Performance - C3.ai has been a prominent name in the AI space, branding itself as an AI enterprise software company with significant partnerships, including clients like energy giants and the U.S. Air Force [4]. - The company generated $389 million in revenue over the last 12 months, which is significantly lower compared to its quasi-competitor Palantir Technologies, which reported $3.11 billion in revenue during the same period [5][6]. - C3.ai's revenue growth rate was 26% year over year, lagging behind Palantir's 39% growth [6]. Profitability Concerns - C3.ai reported an operating loss of $324 million last fiscal year, with stock-based compensation accounting for approximately 60% of its total revenue, raising sustainability concerns [9][10]. - The company has a bloated expense structure, which is hindering its ability to scale and achieve profitability despite revenue growth [8][10]. Future Outlook - C3.ai's business model, which relies on custom-built software solutions, appears non-scalable, leading to worsening operating losses since going public [12]. - The company has a high price-to-sales (P/S) ratio of 8.5, significantly above the S&P 500 average, coupled with deeply negative operating margins and no history of profitability [13]. - Given the high valuation, substantial losses, and slower revenue growth compared to peers, C3.ai is viewed as a poor investment choice in the current market environment [14].