In a World Abuzz About AI, C3.ai Has a High Short Squeeze Score, Significant Insider Selling
Just as the term “AI” is seemingly on the lips of every CEO, short sellers are flocking to C3.ai (US:AI), according to data compiled by Fintel.
And, as investor excitement about artificial intelligence seems to have helped a near-300% year-to-date rise in the price of AI stock, several of the company’s insiders have sold a significant amount of the shares, according to Fintel’s dashboards.
Meanwhile, the Short Squeeze Score on C3.ai is among the highest of the companies analyzed in the proprietary quant model.
Let’s take a closer look.
AI Everywhere
Corporate CEOs can’t stop talking about AI — again, the tech, not the stock.
Factset’s John Butters recently wrote that the topic was mentioned on more first-quarter earnings calls than any time in the last five years.
In fact, artificial intelligence seems to have replaced ESG as the buzzword of choice among the leaders of the S&P 500 index companies.
Of the index’s constituent companies, 110 cited the term “AI” on their earnings call for Q1, up from 78 in Q4 2022 earnings calls. The five-year average is 57 mentions, Factset reported.
Easier AI
As for the AI of C3.ai, the company touts a software platform that enables customers to more easily create artificial intelligence-driven ‘predictive’ tools than with competing products. C3.ai also contends that its system enables much more data to be analyzed than the similar offerings of other firms.
It’s also been busy making its generative AI technology more broadly available, with deployments on Amazon’s (US:AMZN) AWS Marketplace and Alphabet (US:GOOGL) unit Google Cloud’s Marketplace.
The fiscal Q4 results issued on May 31 showed the company’s top line was little changed versus the same period a year earlier, while its operating loss increased 77% year-over-year to $73.3 million.
Also negative for AI stock was the fact that its full-year, top-line outlook came in at $295 million to $320 million, versus analysts’ mean outlook of about $321 million.
And while the mention of AI on earnings calls increased and companies widely seen as likely to benefit from the proliferation of artificial intelligence raised their guidance in recent weeks, C3.ai has failed to do so. In fact, its sales guidance was lower than expected.
The company says that it’s on track to enter the black by the end of its current fiscal year, which will be over on April 30, 2024.
Insiders Sell on Highs
Since AI stock started soaring in mid-January, three of the company’s insiders have sold significant amounts of the shares, data compiled by Fintel reveals.
These three insiders are directors Stephen Ward and Richard Levin, and CFO Juho Parkkinen.
On May 30, Ward sold 120,000 shares of AI, while Levin unloaded 24,000 shares on May 25 and Parkkinen disposed of over 4,400 shares on May 1.
On March 31, Levin sold 24,000 shares, while Parkkinen unloaded almost 1,500 shares between March 20 and March 24. The CFO unloaded nearly 5,000 more shares on March 16.
Levin and Parkkinen also sold shares in February.
Short Squeeze Potential
Fintel gives AI stock a rather high Short Squeeze Score of 83.87 out of 100, ranking it 210 out of 4,601 names for which the metric was computed. That scoring model uses a combination of short interest, float, short borrow fee rates, and other metrics.
If you are considering placing a short bet on AI stock this morning, you’ll likely have to pay a high annual interest rate of 20.30% to do so. Still, that’s down from annual rates of 22.6% on June 15 and 23.23% on June 14.
You wouldn’t be alone in that move. On June 16, 58.3% of the trading volume of AI stock away from the major U.S. exchanges involved short sellers. The ratio was up from 54.3% on June 15, 55.98% on June 14, and 41.46% on June 13.
This article originally appeared on Fintel
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