C3.ai (AI 3.50%) stock is seeing significant gains in Thursday's trading. The move is somewhat surprising given that the broader market, and growth-dependent tech stocks in particular, is seeing sell-offs in conjunction with macroeconomic concerns.
C3.ai's share price was up 3.9% as of 3 p.m. ET, according to data from S&P Global Market Intelligence. Meanwhile, the S&P 500 and Nasdaq Composite indexes were down 0.4% and 0.9%, respectively.
NYSE: AI
Key Data Points
Biden's upcoming executive order could boost C3.ai stock
C3.ai stock is gaining today following news that President Joe Biden is expected to sign an executive order on artificial intelligence (AI) next week. While the executive order is expected to include provisions that will regulate the development of AI technologies in order to ensure safety, it's also expected to embrace and bolster initiatives that will see artificial intelligence used as a national security tool.
The development could prove to be a boon to C3.ai, and it's helping to send the stock higher on what has otherwise been a bearish day of trading for the market at large. The company already has contracts with organizations within the U.S. Department of Defense, including the U.S. Air Force and the U.S. Missile Defense Agency. With Biden's upcoming executive order expected to promote the use of AI across multiple national security categories, it's possible that C3.ai could see an uptick in spending from government customers.
What comes next for C3.ai stock?
Thanks to excitement surrounding the artificial intelligence trend, C3.ai has been one of this year's hottest stocks. The company's share price is now up roughly 128% across 2023's trading.
AI PS Ratio (Forward) data by YCharts
While it's possible that the company could see substantial increases in national security related spending from the U.S. government, investors should keep in mind that the company's outlook remains highly speculative. Valued at roughly 9.8 times this year's expected sales, this stock is already priced for some some very strong growth.
The business is still posting losses and has seen its timeline for a shift into non-GAAP (adjusted) profitability pushed further into the future. It's also facing competition from Palantir Technologies and other companies in the AI space. It's possible that C3.ai stock will continue its impressive run, but investors should move forward with the understanding that this is a high-risk, high-reward play.
