September 27th, 2023 | 08:30 CEST
AI shares in focus: C3.ai, Norcom, Amazon - Upgrade at any cost
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"[...] In Canada, there is $1.75 of debt for every dollar of disposable income - and that was true even before the pandemic. [...]" Karim Nanji, CEO, Marble Financial
NorCom GmbH & Co KGaA - Ideally positioned
Munich-based technology provider NorCom has been listed on the stock exchange since 1999 and has thus been able to experience the rise and fall of the new market first-hand. With the onset of the fourth technical revolution based on information and communications technology and driven by Artificial Intelligence, the Company, which has a market capitalization of EUR 14.73 million, could now finally experience its breakthrough.
NorCom offers a complete range of Big Data and AI solutions and thus provides technological solutions for issues that pose challenges for almost all large corporations as well as public administrations: Working with and exchanging large amounts of data quickly and securely, information governance, legally compliant data lifecycle management, and the use of artificial intelligence and data analytics.
This is bundled in the DaSense platform, an advanced AI technology that can analyze documents and trigger and support workflows. It brings together enterprise data from a wide variety of formats and sources, enabling the development of custom applications that can be used directly by business users. In addition, DaSense supports users in analyzing and organizing documents and automates time-consuming, error-prone routine tasks, resulting in higher effectiveness and, thus, lower costs for the customer.
The customer base is made up of many industries. In addition to public authorities such as the Federal Employment Agency or the Federal Audit Office, the industrial company Stihl, the auditing and consulting firm PWC and the car manufacturer Mercedes-Benz Group also rely on the services of the Bavarians. After a strong rise due to the AI hysteria surrounding ChatGPT, the price of NorCom shares corrected and is currently at the level of May this year at EUR 6.60. If demand for innovative AI solutions continues, this area should offer an attractive entry opportunity in the long term.
Amazon with Billion-Dollar Investment
Who will take the pole position in the latest technological revolution? In addition to Microsoft, which has made a billion-dollar investment in OpenAI, and Google, another technology giant, Amazon, is now entering the competition.
The world's leading online retailer plans to invest up to USD 4 billion in Anthropic, a company that created the chatbot Claude. In parallel, both companies announced Monday that Amazon's AWS subsidiary will become the primary cloud infrastructure provider for Anthropic. AI-based chatbots like ChatGPT require immense computing capacity, which comes at a high cost. That is why collaborations with cloud giants such as Microsoft and Amazon are of great value to emerging AI companies. In turn, these tech companies can benefit from the innovations of startups.
From a chart perspective, Amazon shares were able to reach a new high for the year in September but then bounced off the resistance from August of last year at USD 146.57. Currently, the stock is trading at USD 131.27. Analysts on Reuters Refinitiv see the average price target for the stock at USD 174.50.
C3.ai - Wild roller coaster ride
It is not uncommon for companies dedicated to new, innovative technologies to experience high fluctuations in their stock prices. Thus, investors in the US AI company C3.ai are also likely to feel like they are on a roller coaster. The Company, founded by industry veteran Thomas Sibel, started the year strong, surging approximately 380% to a yearly high of USD 48.87 by mid-June. The stock has since given up around half of its gains. Currently, the stock is trading at a broad resistance zone in the USD 24 area.
When publishing its figures for the first quarter of fiscal year 2024, the provider of AI software for enterprises managed to surprise in terms of profitability, but this could not prevent the share price from falling further. According to the report, C3.ai suffered a loss of USD 0.09 per share in the first quarter, beating analysts' forecasts of a loss of USD 0.173 per share.
The Company, headquartered in Redwood City, California, also posted a 10.7% increase in revenue to USD 72.4 million, again exceeding financial experts' expectations of USD 71.6 million. In the second quarter, CEO Siebel expects revenues of between USD 72 million and USD 76.5 million, with between USD 295 million and USD 320 million expected to cross the books in the full year.
Citing growing demand for enterprise solutions in the AI sector, Siebel expressed satisfaction with the first three months of the current fiscal year: "It is difficult to describe the extent of the growing interest we are seeing globally in enterprise AI adoption. Our enterprise AI applications, and C3 Generative AI in particular, are proving very popular," the group CEO said in a statement.
There is a lot of movement in the future market of Artificial Intelligence. Amazon is planning another billion-dollar acquisition. C3.ai is seeing growing interest in its enterprise software. NorCom should benefit from strong demand due to increasing digitization in government agencies and the automotive sector.
Conflict of interest
Pursuant to §85 of the German Securities Trading Act (WpHG), we point out that Apaton Finance GmbH as well as partners, authors or employees of Apaton Finance GmbH (hereinafter referred to as "Relevant Persons") may hold shares or other financial instruments of the aforementioned companies in the future or may bet on rising or falling prices and thus a conflict of interest may arise in the future. The Relevant Persons reserve the right to buy or sell shares or other financial instruments of the Company at any time (hereinafter each a "Transaction"). Transactions may, under certain circumstances, influence the respective price of the shares or other financial instruments of the Company.
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