Investors may remember 2023 as the year AI found its footing. While the technology is not new, the potential for large language models (LLMs) like ChatGPT to change life as we know it has reinvigorated many AI stocks.

Nonetheless, the gains do not mean that all AI stocks benefited proportionately. Some stocks have probably risen too far as a result, while others have not been appreciated enough.

Below are two stocks on the two ends of these extremes:

The stock not getting enough love: Twilio

Twilio (TWLO 0.90%) is a leader in the communications platform-as-a-service (CPaaS) space. CPaaS deals with communications apps that manage voice, video, text, and email connections between a company and its customers. Such apps make popular businesses like Uber, DoorDash, and Airbnb possible.

Twilio stock had sold for as much as $457 per share in early 2021. But during the 2022 bear market, investors turned on Twilio amid fears of competition and mounting losses, wiping out more than 90% of its value at one point.

Indeed, many competitors have started similar companies. Still, Twilio was a first mover in the space, and switching is a highly disruptive process. It also has added functions to help its clients, such as the Twilio Flex Contact Center, that eliminate the need for clients to develop similar software in-house. One client -- and now investor -- is Amazon, which bought nearly 1.8 million shares and, through AWS, will bring more AI capabilities to Twilio's customers.

Admittedly, the financials offer a mixed picture. In the first quarter of 2023, its revenue of around $1 billion rose 15% over the previous year. Also, even though non-cash costs led to $342 million in GAAP losses, it reported a non-GAAP (adjusted) net income of $88 million, meaning its operations are profitable.

Despite its gains for the year, Twilio sells at an 85% discount from its early 2021 high, and its price-to-sales (P/S) ratio of 3 is coming off all-time lows. But thanks to its increasing product offerings and growing AI capabilities, Twilio could recover some of the enthusiasm investors once felt for this stock.

The stock getting more love than it deserves: C3.ai

C3.ai (AI -2.64%) is up 275% since the beginning of the year. Admittedly, its "AI" stock symbol may have attracted increased investor interest with the recent focus on artificial intelligence.

As a leader in enterprise AI software, its software helps businesses with tasks ranging from inventory management to supply chain optimization, applying generative AI to discover insights using public and privately held data.

Thanks to these applications, it has built a client list that includes a conglomerate like Koch Industries, government entities such as the U.S. Air Force, and numerous other companies in multiple industries.  

Unfortunately, its impressive customer list and AI capabilities have done little to help the top and bottom lines. In its fiscal fourth quarter (ended April 30), revenue came in at just over $72 million, approximately the same as year-ago levels. Amid rising operating expenses, its net loss widened to $65 million versus $58 million in the prior year.

For the fiscal year, it forecasts $308 million in revenue at the midpoint, improving revenue growth to a 15% increase if the forecast holds.

Unfortunately, with the rising stock price, its P/S ratio exceeds 17, up from just over 4 at the beginning of the year. That sales multiple gives the SaaS stock little room for error, considering its anemic revenue growth. With the market offering faster-growth AI stocks at lower valuations, investors have little reason to buy C3.ai at current levels.