Are you looking for artificial intelligence (AI) stocks that could be good buys amid the recent stock market downturn? If you’re willing to take risks, some stocks in bad shape can generate good returns, at least according to Wall Street.
Based on analyst price targets, C3.ai (NYSE:IA) And Bigbear.ai (NYSE:BBAI) could both generate returns of 40% or better in the near future. Here’s a closer look at these stocks and what would need to happen for them to recover.
1. C3.ai
C3.ai shares have plunged 25% so far in 2024. This comes after a much stronger rally in 2023, when the stock surged 157% amid hype around AI.
C3.ai simply hasn’t generated the kind of growth investors might have expected from a AI Actions. While the chipmaker Nvidia tripled its sales figures, C3.ai’s revenue grew at a much more modest rate of 18% last quarter, for the period ending January 31. And revenue of $78.4 million for the period was up just 7% from the previous quarter. -on a quarterly basis compared to the previous period.
However, the company remains optimistic. C3.ai provides businesses with AI services to help them improve throughput and efficiency. In its latest earnings release, the company highlighted a 71% increase in the number of new pilots launched (29) compared to the previous year. And the number of deals concluded (50) was also 85% higher than a year ago.
If all these deals and pilots pay off, the stock could make big money. According to Wall Street analysts’ consensus price target of just under $30, C3.ai shares could rise about 40% from their current level.
Investors would need a reason to rally, however, and a much higher rate of revenue growth could achieve that. And given its uninspiring results so far and the company’s continued lack of profitability, C3.ai is not a stock I would take a chance on today. While the opportunities her Well, investors might be better off waiting to see that the results are there to back up the hype and enthusiasm.
2. BigBear.ai
Like C3.ai, BigBear.ai had a big year in 2023, as its shares rose 218%. This year, it also gave back some of those gains as BigBear.ai’s stock performed slightly worse, falling about 26%. The upside potential is, however, much higher according to analysts. Analyst consensus price target for BigBear.ai is $3, which is close double where the stock is trading today.
BigBear.ai’s goal is to focus on multiple opportunities in the AI space, including supply chain management, national security, and digital identity. The company recently strengthened these growth prospects with the acquisition of Pangiam Intermediate Holdings, a leading vision AI company. Its products and services can help scan and identify individuals.
However, the problem with BigBear.ai also lies in the lack of growth. For all the exciting prospects this seems to hold on the horizon, the results simply haven’t been there to imply that a near-term opportunity is within reach.
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