C3.ai (NASDAQ:AI)

Sometimes all it takes for a stock to rise is a little extra love from analysts. That’s what happened to C3.ai (NASDAQ:AI) today as it jumped in Friday afternoon’s trading. Most of those gains all came down to fresh commentary from an analyst who believes there’s more to C3.ai than meets the eye.

D.A. Davidson analyst Gil Luria initiated coverage on C3.ai with a Buy recommendation and a $30 price target. That’s a pretty impressive start, but the why behind it is almost better. Luria referred to C3.ai as “…a truly scarce asset in a critical software arena.” Scarcity is good, but Luria went on to call C3.ai a “killer app” in the artificial intelligence field. Part of this likely traces back to C3.ai’s planned release of C3 Generative AI for Enterprise Search, a tool that takes some of the biggest names in software and uses them to help people find information in enterprise systems.

Another part also traces back to the recent boom in AI in general. Microsoft (NASDAQ:MSFT) put heavy investment behind ChatGPT and other such tools. Alphabet (NASDAQ:GOOG), also put a lot of investment into AI, to the point where last night’s investor call was filled with references to its work in this field.

Despite this, Wall Street is clearly taking the wait-and-see approach. With analysts almost perfectly split, consensus calls C3.ai stock a Hold with an average price target of $16.50, giving it 36.9% downside risk.