Business

Stock-Split Watch: Is C3.ai Next?

Published

1 month ago

July 24, 2025

Companies can use stock splits as a way to change their stock price and share count.
They often happen for a specific reason.
While they aren’t necessarily easy to predict, there are a few clues investors can look for.
10 stocks we like better than C3.ai ›

Stock splits are tools that companies can use to artificially manipulate their stock prices or share count. While they aren’t always easy to predict, they are typically done for a specific reason and tend to draw interest from shareholders.

C3.ai (NYSE: AI) has been a popular stock to watch among retail investors, as the company has tried to tap into the enthusiasm brought about by the high-flying artificial intelligence (AI) sector. The company hasn’t had a great year, and the stock is actually down significantly since going public at the end of 2020. Could a stock split be in the cards?

Before we examine whether C3.ai could conduct some kind of stock split in the near future, it’s important for investors to understand what a stock split and reverse stock split is.

Image source: Getty Images.

A stock split allows a company to decrease its share price and increase its shares outstanding, while a reverse stock split does the opposite. It’s crucial for investors to remember that stock splits do not change the market cap of a company, so if you own an equity position in a stock before some kind of stock split, the share price might change, but the actual equity position doesn’t.

Why would a company undergo a stock split? Well, there are a few reasons, but the big one has to do with bringing the share price up or down for a strategic reason.

Let’s say some high-growth AI company just went on a massive run, and now their stock price trades for more than $1,000 per share. That might look daunting to retail investors, so a company would conduct a stock split to lower the share price in order to make it more appealing. Stock splits can also boost liquidity.

A reverse stock split can be a useful tool if a company on the New York Stock Exchange or Nasdaq has fallen out of compliance. Both major exchanges require stocks to trade for over $1 per share for 30 consecutive trading days. If a company is struggling and has seen a big sell-off, but thinks they can turn things around and wants to stay on a major exchange, than a reverse stock split can increase the share price and serve as a bridge until the company gets back on its feet.

The enterprise AI company C3.ai has never conducted any kind of stock split. After listing its initial public offering at $42 in late 2020, the stock surged to as high as $161 per share, but now trades around $28.50 and at a $3.9 billion market cap. So the stock is not unattainable for investors in terms of price and also clearly in compliance with NYSE rules.

According to MarketWatch data, the majority of the firm’s nearly 131 million outstanding shares are public, so there doesn’t appear to be any need to boost liquidity. The only way C3.ai is likely to conduct a reverse stock split is if it experiences a significant sell-off, which is not necessarily impossible, especially if the stock market starts to struggle.

In the company’s fiscal year, C3.ai lost nearly $289 million on revenue of about $389 million. That means the stock is likely overvalued — at least when looking at valuation. Short interest at the end of June was also very high, at close to 21% of the public float.

However, it is not uncommon for AI companies with strong potential to trade at these kinds of valuations. C3.ai does seem to have potential. The company’s software helps developers build AI applications, even if they don’t have a ton of experience with building large language models. C3.ai also claims its software can help developers significantly cut down the time required in writing this complicated code.

Ultimately, while C3.ai might be overvalued, it still seems very unlikely that it would experience the kind of intense sell-off that would require the company to conduct a reverse stock split.

Before you buy stock in C3.ai, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and C3.ai wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004… if you invested $1,000 at the time of our recommendation, you’d have $641,800!* Or when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $1,023,813!*

Now, it’s worth noting Stock Advisor’s total average return is 1,034% — a market-crushing outperformance compared to 180% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of July 21, 2025

Bram Berkowitz has no position in any of the stocks mentioned. The Motley Fool recommends C3.ai. The Motley Fool has a disclosure policy.

Stock-Split Watch: Is C3.ai Next? was originally published by The Motley Fool

Source link

Up Next

Four things you need to know about UK-India trade deal

Don't Miss

Ex-minister tasks corporate boards to adopt ethical AI practices in business operations

Bram Berkowitz, The Motley Fool

Click to comment

Business

AI company Anthropic to pay authors $1.5 billion in landmark settlement

Published

3 hours ago

September 6, 2025

The Editors

Big numbers often get thrown around in the aftermath of legal battles, as judges hand down judgements—or attorneys arrange settlement amounts—in the tens, or hundreds, of millions of dollars. Still, even jaded legal observers can occasionally run into a genuinely daunting number while parsing this stuff. Like, say, the $1.5 billion settlement that AI company Anthropic has agreed to pay in the ongoing class-action suit against it, launched by authors who said the company infringed on their copyrighted works by feeding them as training data to its “AI assistant” Claude. Sure, parts of that sum (calculated at $3,000 per work for a staggering number of works, and with its first $300 million installment due just five days after the settlement is approved) might potentially vanish in a puff of future bankruptcy. But it’s still the “largest publicly reported copyright recovery in history,” according to legal documents from the authors’ attorneys.

That being said, the win here on the wider AI front is quite a bit less clear than “hand our clients the annual estimated GDP of Grenada” might suggest. Yes, U.S. District Judge William Alsup set the stage for Anthropic to eat that massive price tag by ruling that the company clearly violated copyright agreements via how it acquired the books it fed into its own personal woodchipper. (I.e., downloading pirated datasets of millions of books that had been floating around the internet.) And, yes, the settlement will require Anthropic to destroy those “shadow library” datasets in its possession. (But notably, with no actual changes to the Claude large language model itself.) Most critically, though, back in June, Alsup also ruled that “reproducing purchased-and-scanned books to train AI” falls under fair use, calling the case “exceedingly transformative” as a justification for the designation.

As such, both sides in the fight issued statements claiming a form of victory today, with the authors’ side focusing mostly on the massive size of the settlement amount. Anthropic, meanwhile—which has been backed in the past with more than $6 billion in contributions from Amazon and Google—focused its statements on the legal precedent it achieved in the case: “In June, the District Court issued a landmark ruling on AI development and copyright law, finding that Anthropic’s approach to training AI models constitutes fair use. Today’s settlement, if approved, will resolve the plaintiffs’ remaining legacy claims.” What this likely means is that AI companies aren’t going to slow down—especially with, say, a $1.5 billion mortgage suddenly hanging over their heads—but simply become a lot more choosy about how they get their training data.

[via Deadline]

Source link

Business

Broadcom Inc. Reports Record Revenue Amid AI Growth

Published

3 hours ago

September 6, 2025

TipRanks Auto-Generated Newsdesk

Broadcom Inc. ((AVGO)) has held its Q3 earnings call. Read on for the main highlights of the call.

Elevate Your Investing Strategy:

Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.

The recent earnings call from Broadcom Inc. showcased a strong performance in AI semiconductors and infrastructure software, with record revenues and a solid backlog. Despite some challenges in the non-AI semiconductor segment and pressures on gross margins due to product mix, the overall sentiment was optimistic. The positive highlights significantly outweighed the lowlights, indicating a promising outlook for future growth, particularly in AI.

Record-Breaking Revenue and Growth

Broadcom Inc. reported a record total revenue of $16 billion, marking a 22% increase year-on-year. This impressive growth was primarily driven by the strong performance in AI semiconductors and the expansion of VMware. The company’s ability to achieve such significant revenue growth underscores its strategic focus on high-growth areas.

AI Semiconductor Growth

The AI semiconductor segment was a standout performer, generating $5.2 billion in revenue, which represents a 63% increase year-on-year. This marks the 10th consecutive quarter of robust growth in this segment. Looking ahead, Broadcom forecasts AI semiconductor revenue to reach approximately $6.2 billion in Q4, up 66% year-on-year, highlighting the company’s leadership in this rapidly expanding market.

Infrastructure Software Segment Performance

Broadcom’s infrastructure software segment also delivered strong results, with revenue reaching $6.8 billion, up 17% year-on-year. The total contract value booked during Q3 was $8.4 billion, reflecting the company’s strength in securing long-term commitments from customers.

Strong Backlog and Bookings

The company’s consolidated backlog reached a record $110 billion, with bookings showing robust growth, particularly in AI. This substantial backlog provides a solid foundation for future revenue and demonstrates strong customer demand across Broadcom’s product lines.

CEO Tenure Extension

In a significant leadership development, Broadcom’s board and CEO Hock Tan have agreed that he will continue as the CEO through at least 2030. This extension provides stability and continuity in leadership, which is crucial for executing the company’s long-term strategic vision.

Non-AI Semiconductor Demand

While the AI segment thrived, the non-AI semiconductor demand remained sluggish, with Q3 revenue of $4 billion flat sequentially. Enterprise networking and service storage experienced sequential declines, with only broadband showing strong growth. This highlights the challenges Broadcom faces in certain segments of its semiconductor business.

Gross Margin Impact

Broadcom anticipates a slight decline in its Q4 consolidated gross margin, down approximately 70 basis points sequentially. This is primarily due to a higher mix of XPUs and wireless revenue, which impacts the overall product mix and margin structure.

Forward-Looking Guidance

During the earnings call, Broadcom provided robust guidance for the upcoming quarter and fiscal year. The company forecasts Q4 2025 consolidated revenue of $17.4 billion, up 24% year-on-year, with AI semiconductor revenue expected to reach $6.2 billion, up 66% year-on-year. Infrastructure software revenue is projected at $6.7 billion, up 15% year-on-year. Broadcom anticipates an adjusted EBITDA margin of 67% for Q4, with continued growth in the AI business and the addition of a significant fourth customer expected to positively impact fiscal 2026.

In summary, Broadcom Inc.’s latest earnings call highlighted a strong performance in AI semiconductors and infrastructure software, with record revenues and a promising outlook for future growth. Despite some challenges in non-AI segments and margin pressures, the overall sentiment was optimistic, driven by significant achievements and robust forward-looking guidance.

Disclaimer & Disclosure Report an Issue

Source link

Business

Runway founder Cristóbal Valenzuela wants Hollywood to embrace AI

Published

4 hours ago

September 5, 2025

The Editors

At 84, veteran mogul John Malone is still a power broker, hinting at “further consolidation in the media industry” following a recent sit down with David Ellison. Should we be on the lookout for a Warner–Paramount merger? Meanwhile in Vegas, the Sphere’s $100 million Wizard of Oz reimagining leans on AI to expand the visuals and even slip in cameos of David Zaslav and James Dolan. The Directors Guild did not take kindly to the stunt. Partners in Banter Kim Masters and Matt Belloni pull back the curtain on the Sphere’s Emerald City sideshow.

Plus, Masters speaks with Runway co-founder Cristóbal Valenzuela about the role of artificial intelligence in Hollywood. The Chilean-born developer acknowledges that AI may lead to some job losses, but he argues it will ultimately benefit filmmakers. He explains why studios including Lionsgate, Netflix, and Disney are already using Runway’s tools. Plus, he compares the current backlash against AI to the upheaval that followed the introduction of sound in film.

Source link