This AI stock is up 25% on Friday: find out why

C3.ai Inc (NYSE: AI) opened more than 20% up on Friday after reporting strong results for its third financial quarter on emerging trends in artificial intelligence.

C3.ai stock up on encouraging guidance

The California-based company says it’s committed to adjusted profitability and turning cash positive by the end of fiscal 2024.

For its current financial quarter, C3.ai is now calling for $70 million to $72 million in revenue – slightly above $69.9 million that analysts had anticipated.

Adjusted loss is expected in the range of $24 million and $28 million in Q4. On CNBC’s “Closing Bell: Overtime”, CEO Tom Siebel said:

C3.ai's third-quarter financial highlights

• Net loss printed at $63.16 million versus the year-ago $39.44 million
• Per-share loss also increased significantly from 38 cents to 57 cents
• Adjusted loss came in at 6 cents a share as per the press release
• Revenue slipped nearly 5.0% year-on-year to $66.67 million
• Consensus was 22 cents of adjusted loss on $63.9 million in revenue

C3.ai's subscription revenue

C3.ai also confirmed that it’s converted the majority of its customers to a subscription-based business model.

At $57 million, subscription revenue made up 85% of the company’s overall revenue this quarter. The chief executive added:

Wall Street currently has a consensus “hold” rating on C3.ai stock.

CEO's response to a recent short sell opinion

Other notable figures in the earnings report include adjusted gross margin of 76%. Remaining performance obligations sat at $403.2 million at the end of the third quarter.

The stock market news arrives shortly after Spruce Point Capital Management announced its strong sell research opinion on C3.ai stock. Responding to it, CEO Siebel said:

C3.ai stock has more than doubled year-to-date.