One of the most-watched stocks today has to be C3.ai (NYSE:AI). Ahead of the company’s upcoming earnings report tomorrow, shares of AI stock are exploding higher. At the time of writing, this artificial intelligence ( ) company has surged more than 20%. Investors are seeking out ways to play this trend.
The company’s relatively small market capitalization (now above $4 billion after today’s rise) could be a big driver of this kind of move. Other large AI-related stocks, such as Nvidia (NASDAQ:NVDA) and Marvell (NASDAQ:MRVL), have seen similar surges in recent days following these companies’ incredible earnings reports.
Aside from earnings-related expectations, there are other catalysts investors are pricing into AI stock today. These include the company’s newly announced availability of its generative AI on Amazon’s (NASDAQ:AMZN) AWS marketplace. Today’s AWS announcement follows a previous announcement from last week that the company’s generative AI would be available on Alphabet’s (NASDAQ:GOOG, NASDAQ:GOOGL) Google Cloud’s marketplace.
Let’s dive into what investors may want to make of this move.
AI Stock Surges on Key Catalysts
There’s no doubt that this AI boom is a rising tide that’s lifting all boats. Indeed, the entire sector is seeing a 2021-esque kind of move, which may make some investors nervous.
For C3.ai, an artificial intelligence company that’s widely considered a pure play on this space, this kind of move makes sense. Other larger companies have seen similar outsized moves after simply upgrading their guidance.
From here, C3.ai will certainly have to show that its outlook matches the market’s expectations. Tomorrow’s earnings report better be a blowout, with positive company commentary on its integrations with both Amazon and Alphabet’s cloud divisions. Anything other than a massive guidance raise and earnings beat will likely be met with a selloff.
Accordingly, AI stock remains one of the more volatile options for investors right now. Personally, this stock doesn’t fit my risk profile, as I think it’s likely run too far too fast. That said, this sort of mania can last for quite a while, so perhaps there’s plenty of room to run for this $4 billion company. We’ll see.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.