For Whom the Bell Tolls - It Tolled Today for AI - Mostly

The AI gold rush seemed to cool off a bit today and of course the question is: Is it just pausing to take a quick breath - or - is it completely gassed for the moment?

Today C3I reported and it didn’t go all that well. Over the last 5 days the stock had run-up by just over 37% and by a remarkable 261% YTD. Here is what they reported:

  • Revenue of $72.41M (+0.1% Y/Y) beats by $1.07M.

  • Q4 Non-GAAP EPS of -$0.13 beats by $0.04.

  • Subscription Revenue: Subscription revenue for the quarter was $56.9 million, constituting 79% of revenue.

  • Non-GAAP gross profit for the quarter was $53.9 million, representing a 74% non-GAAP gross margin.

  • Remaining Performance Obligations (“RPO”): GAAP RPO was $381.4 million.

  • Q1 Outlook: Total revenue $70.0 - $72.5M vs. consensus of $71.34M; Non-GAAP loss from operations ($25.0) - ($30.0)M.

Press Release Here:

A few Quotes from the CC:

“In the fourth quarter, we increased our customer base, expanded our work with existing clients and saw especially strong growth in our federal business. In the fourth quarter, our total revenue was $72.4 million, our free cash flow was $16.3 million and we ended the quarter with over $812 million in cash and cash equivalents.”

“Importantly, we have a well-defined plan to be sustainably cash positive and non-GAAP profitable by the end of this fiscal year. For fiscal year 2024, I’m sorry, for the fiscal year 2023, okay, total revenue was $266.8 million, an increase of 5.6% over fiscal year ’22, okay. Subscription revenue was $230.4 million, representing an 11.4% increase over the prior year.
cash flow was $16.3 million and we ended the quarter with over $812 million in cash and cash equivalents.”

"Let’s talk a little bit about the AI applications market. Now as the enterprise AI market has developed. It appears that the bulk of the demand is increasingly for turnkey enterprise AI applications rather than for development tools.

We are seeing increasing diversity in the industries we serve. For fiscal year ‘23, an analysis of our bookings includes: oil and gas was 34%; federal, defense, aerospace was 29%, high-tech, tech was 13%; energy and utilities 11%; manufacturing 4%; food processing 2%; chemicals 2%; life sciences 1.5% and other industries made up the remaining 3%.

During fiscal year ‘23, we closed 126 agreements, up from 83 in the prior year. The average sales cycle for new and expansion deals was 3.7 months down from five months in Q4 of the previous year. "

Here is the CC Transcript:

Here is the accompanying slide presentation:

Fan Reaction: Boooooo Hissssssss: Shares got slammed by a little over 22% during After Hours trading after getting trimmed about 9% during the day. The day haircut was the AI clan getting a break tap from the market at large while the After Hours pounding was all about C3I.

Now how does that all fit in with today’s general AI retreat? Well - here is the rest of - or at least a fairly healthy sample, of AI guys getting hammered a bit today:

  1. Everybody’s second favorite AI Company: SMCI

Finished the day at $223.95 and sank as low as $216 at one point. Lopped off another 95 Cents a share during After Hours.

  1. The Big Dog: NVDA

Closed at $378.44 losing -5.68% ( - $22.77 per share) and sitting right on top of its low for the day. After Hours saw a small recovery of a buck or so.

  1. The Chihuahua to NVDA’s Doberman: AMD

Closed down 5.64% on the day at $118.21 losing $7.06 per share. Got as low as $117.86 during the day and then decided to trim another 59 Cents off during After After Hours.

  1. MRVL

Got a running start to todays AI swoon by selling off yesterday by about -3.22%: and hit the ground at full speed into todays close losing another -7.74%. Lost a bit more in After Hours.

Interestingly enough, neither AVGO or ASML showed up for the AI haircuts today.

So what to make of it all? So how to interpret todays AI results? Not all that much really - one day, one way or the other, is pretty meaningless in the grand scheme of things; However, we did find out today that AI - while not human, is certainly not bullet proof.

All the Best,
BDH Investing.


It will be nice to see how things turn out in the next week or so. If this entire things fizzles out, this will be the shortest hype/ bubble ever…

And to be honest, it is atrocious that NVDA gives blow out results…and the other stocks have increased in price even more than NVDA itself :rofl:

But I hope the entire market runs, as it is far more enjoyable to see happy posts rather than negative ones