Tesla CEO Elon Musk has announced the founding of X.AI, a new AI company that is set to take on Google, Microsoft’s ChatGPT, and C3.ai. Musk, who is the sole director of the company, plans to sell 100 million shares of X.AI in a private sale. The news has caused the AI stock to rise by nearly 5%. The new entrant in the AI space has investors wondering if AI stock is a buy.
C3.ai CEO Tom Siebel sees AI applications hitting $600 billion as everyone will eventually use enterprise AI. Ark Investment Management’s “Big Ideas 2023” report predicts that AI will add $200 trillion to the economy by 2030. Generative AI will increase efficiency for professionals and AI stock has first-mover advantage, touting partnerships with Google parent Alphabet, Amazon, Microsoft, Accenture, Baker Hughes and others.
Although AI stock reported sales of $66.7 million in the last quarter, down 4% YoY, it still beat guidance of $63-$65 million. The company posted a net loss per share of 6 cents, slightly better than the 7 cents per share loss last year. The CEO predicts the company will become profitable in fiscal 2024. The generative AI stock disclosed $789.8 million in cash to carry it through “equity market turbulence,” helping to invest in growth through enterprise AI innovation and sales expansion.
While the stock rose on news of Musk’s venture, its earnings remain on watch. According to the CAN SLIM investment strategy, stocks with strong records of sales and earnings growth that offer clear buy points from bases are sound picks. AI stock has broken out of a base on the news. Its earnings remain on watch.