Is C3.ai Stock a Buy Now?
The recent buzz around artificial intelligence (AI) has given C3.ai (NYSE: AI) stock a massive boost in 2023. Shares of this pure-play enterprise AI software provider are up 123% so far this year as investors recognize the growing demand for AI applications. But recent developments suggest that the company's terrific stock market rally may be in danger, at least in the short run.
Short-seller Kerrisdale Capital this week issued a report accusing C3.ai of accounting fraud, and the stock fell significantly on this news. Kerrisdale claims C3.ai inflated its revenue and margin in a bid to appear as a software-as-a-service company while it is actually a consulting services provider. The report claims this allowed C3.ai to enjoy an inflated valuation on the market. Kerrisdale also points out that the company's accounts receivables grew at a much faster pace than revenue, suggesting that C3.ai is inventing revenue to meet Wall Street's expectations.
It remains to be seen if these accusations are credible and investors await a response from C3.ai management as Kerrisdale has levied serious allegations against the company.
Source Fool.com
