Don’t Get Triggered! This AI Stock Is Only for Very Patient Investors.

Are you a long-term shareholder in enterprise AI company C3.ai (NYSE: AI), or are you hoping for a significant leap in its stock price in the first quarter of 2024? It's okay to be optimistic about C3.ai in general, but remember to manage your expectations when you invest in its stocks. If not, you might be unprepared to handle the potential setbacks along the way. Although C3.ai's stock performance was commendable in 2023, it was not the noteworthy performer. Therefore, don't assume that the following year will yield stunning returns. If you're considering an investment in C3.ai, it would be best to keep your investment position small and avoid obsessively checking the stock price. Could C3.AI's stock achieve a tenfold return? InvestorPlace contributor Joel Baglole's suggestion that AI stocks could see a 1,000% growth by 2030 is not something I dispute, especially if the machine learning trend continues to develop. However, 2023 was the year of generative AI hype. Moreover, C3.ai's impressive stock performance can't be entirely attributed to the company's growth. Truth be told, C3.ai gained the attention of Wall Street due to riding on the success of ChatGPT creator OpenAI and AI processor giant Nvidia (NASDAQ: NVDA ). C3.ai also released a few updates in December, including its Q2 fiscal 2024 financial report which revealed a 17% YoY revenue growth. This indicates stable growth, but not spectacular performance. In addition to this, C3.ai's subscription revenue, the company's primary source of income, increased by 12% YoY, a figure that's pretty good, but not phenomenal. CEO of C3.ai suggests more expenditure Since C3.ai reported a loss of 59 cents per share in Q2 fiscal year 2024, it would be logical to assume that the company would try to exercise stringent financial control to achieve profitability. However, C3.ai CEO Tom Siebel appears to support more investor spending. At the end of 2024's second quarter, C3.ai had $762.3 million in cash, cash equivalents, and investments. If you round this figure to $800 million, you may wonder if C3.ai should instantly spend this capital. Siebel seems to recommend investing it instead of saving it. Critics of this strategy might disagree vehemently as there's no assurance that the generative AI hype will continue with the same momentum in 2024 as it did in 2023. Therefore, if Siebel insists on spending C3.ai's capital soon, it could negatively impact the company's short-term profitability. C3.ai Stock: Stay Invested, but in a Small Capacity Don't misunderstand the situation. C3.ai is part of the AI technology trend, but unlike OpenAI and Nvidia, it isn't leading this trend. C3.ai's bottom line could suffer if the company opts for significant expenditure in 2024. Thus, investors should consider the short-term risks of AI stocks. The ideal strategy would be to remain invested for several years, and not just for a few months. And most importantly, always keep your investment position in C3.ai small, regardless of your belief in the company.