September 10th, 2024 | 07:30 CEST
Broadcom, BlockchainK2, C3.ai - AI hype in full swing
The rise in the use of artificial intelligence continues unabated. Therefore, the current correction in AI-related stocks should be seen as a long-term entry opportunity. The fact that the US data specialist Palantir is the first player to make it into the elite S&P 500 shows just how important the super cycle, which is still at the beginning, already is. In addition, new companies are constantly entering the market, which could significantly increase their stock market value in the future with innovative technologies.
time to read: 3 minutes
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Author:
Stefan Feulner
ISIN:
BROADCOM INC. DL-_001 | US11135F1012 , BLOCKCHAINK2 CORP | CA09369M1077 , C3.AI INC | US12468P1049
Table of contents:
"[...] 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
Author
Stefan Feulner
The native Franconian has more than 20 years of stock exchange experience and a broadly diversified network.
He is passionate about analyzing a wide variety of business models and investigating new trends.
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C3.ai - Outlook dampens the share price
Alongside Palantir, which, according to analysts at Forrester Research, is becoming one of the most prominent players in the market, the Company founded by tech veteran Thomas Siebel is considered one of the most promising companies in the enterprise software space. In the current financial quarter, C3.ai significantly improved its performance compared to the previous year and even slightly exceeded analysts' estimates. With an increase in revenue of 20.5% to USD 87.2 million compared to the same period last year, the Company remains on a growth trajectory.
In terms of adjusted earnings per share, the Company from Redwood City in California was also able to beat the expectations of experts, who were expecting a loss of USD 0.13 per share, with a loss of just USD 0.05 per share. Despite a total net loss of USD 62.8 million according to GAAP, of which almost USD 55 million was attributable to stock compensation, C3.ai has stabilized its financial situation compared to the same quarter last year, when a net loss of over USD 64 million was recorded.
However, the outlook dampened investor sentiment, causing the share price to fall by up to 18% to USD 18.85 following the announcement of the figures. At USD 91.1 million, the revenue forecast for the second fiscal quarter is slightly below analysts' estimates of USD 91.3 million.
For the year as a whole, C3.ai expects revenue of between USD 370 million and USD 395 million, although this estimate also falls short of market forecasts. The forecast operating loss is anticipated to amount to USD 95 to 125 million.
BlockchainK2 - Innovation with growth potential
Still largely unknown, the holding company BlockchainK2, valued at just CAD 4.24 million, invests in companies with the potential to accelerate the blockchain technology revolution in their respective industries, whether in gaming, finance, or healthcare. The Canadians are currently forging the hottest iron with the RealBlocks financial platform, which meets the needs of the modern investment community by improving access and liquidity to alternative investments. Here, RealBlocks connects fund managers with its network of distribution partners, including placement agents, third-party marketers, independent brokers, and major banking groups.
The total addressable market was already valued at USD 14.00 trillion in 2023, according to Preqin. RealBlocks' customer base is diverse and includes institutional real estate fund managers, venture capital secondary market funds, hedge funds, private credit funds, infrastructure funds, and insurance companies, among others.
The US real estate asset manager LaSalle Investment Management chose the RealBlocks platform to market its USD 77 billion global real estate portfolio. In addition to BlockchainK2, notable investors include Morgan Creek Digital, Science Inc. and Ulu Venture.
Despite its promising positioning, BlockchainK2's share price has yet to benefit significantly, and it is currently trading at a low for the year of CAD 0.14. Around 30% of the Company remains in the hands of the management and the founders.
Broadcom - Analysts optimistic
Semiconductor giant Broadcom also took a beating following the publication of its third-quarter results, losing almost 10% of its value to USD 136.60. Here, too, the outlook of USD 14 billion for the final quarter dampened the good mood, while analysts had expected USD 14.1 billion.
In the third quarter, which ended at the end of July, Broadcom's revenue rose by 47% year-on-year to around USD 13.1 billion, exceeding market expectations. However, the significant increase is mainly due to the acquisition of the software company VMware. Without its business contribution, the increase in sales would have been 4%. Broadcom expects that technologies for applications with artificial intelligence will generate sales of USD 12 billion in this financial year.
In the end, Broadcom reported a quarterly loss of USD 1.875 billion, compared to a profit of USD 3.3 billion in the previous year. The Company attributed the losses to a USD 4.5 billion charge resulting from the relocation of intellectual property rights to the US as part of a supply chain restructuring.
Despite the sobering outlook, the analyst community remains positive. After the figures, the US investment bank Goldman Sachs raised its target price for Broadcom from USD 185 to USD 190 and reiterated its "Buy" recommendation.
The market for artificial intelligence is growing, and new innovations are emerging. BlockchainK2 should benefit from this due to the increasing demand for blockchain solutions. C3.ai and Broadcom's outlooks were not very convincing, but analysts continue to see high potential.
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