Yesterday, we discovered some potential trouble afoot for C3.ai (NASDAQ:AI) over accounting issues. Today, meanwhile, didn’t bring much relief. Investors sent C3.ai down another 14% at the time of writing amid these concerns. However, C3.ai wasn’t the only one that took a downward slump: several other AI stocks also took a hit from C3.ai’s fallout.
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Yesterday, a letter from Kerrisdale Capital shook up a lot of investor confidence in C3.ai. The letter, which not only went to Deloitte & Touche LLP (C3ai’s auditors) but also to the SEC, detailed “serious accounting and disclosure issues,” among other things. That put a negative halo effect out on several other AI stocks, including Guardforce AI (NASDAQ:GFAI), which lost close to 23% in Wednesday afternoon trading.
However, C3.ai brought out a response just recently in which it denied all the allegations that Kerrisdale Capital’s letter set forth. Responding to the denial, Kingsley Crane—an analyst with Canaccord Genuity—noted that there was “…no evidence of any real wrongdoing or fraud in the short-seller report, but it raises some concerns and investors could benefit from more clarity.”
Overall, analyst consensus calls C3.ai stock a Hold, with three Buys, three Holds, and two Sells assigned in the past three months. However, it also comes with a slight downside risk of 2.5%, thanks to its average price target of $20.71.
