Reflecting On Data Infrastructure Stocks' Q1 Earnings: C3.ai (NYSE:AI)
Generating insights from system level data is an increasing priority for most businesses, but to do so requires connecting and analyzing piles of data stored and siloed in separate databases. This is the demand driver for cloud based data infrastructure software providers, who can more readily integrate, distribute and process information vs. legacy on-premise software providers.
The 4 data infrastructure stocks we track reported a satisfactory Q1. As a group, revenues beat analysts' consensus estimates by 0.8% while next quarter's revenue guidance was 0.9% below.
Thankfully, share prices of the companies have been resilient as they are up 6.3% on average since the latest earnings results.
C3.ai (NYSE:AI)
Founded in 2009 by enterprise software veteran Tom Seibel, C3.ai (NYSE:AI) provides software that makes it easy for organizations to add artificial intelligence technology to their applications.
C3.ai reported revenues of $108.7 million, up 25.6% year on year. This print exceeded analysts' expectations by 0.8%. Overall, it was a strong quarter for the company with an impressive beat of analysts' EBITDA estimates and a narrow beat of analysts' billings estimates.
C3.ai pulled off the fastest revenue growth and highest full-year guidance raise of the whole group. Unsurprisingly, the stock is up 24.3% since reporting and currently trades at $28.65.
Is now the time to buy C3.ai? Access our full analysis of the earnings results here, it's free.
Best Q1: Elastic (NYSE:ESTC)
Started by Shay Banon as a search engine for his wife's growing list of recipes at Le Cordon Bleu cooking school in Paris, Elastic (NYSE:ESTC) helps companies integrate search into their products and monitor their cloud infrastructure.
Elastic reported revenues of $388.4 million, up 16% year on year, outperforming analysts' expectations by 2.1%. The business had a strong quarter with accelerating customer growth and a solid beat of analysts' EBITDA estimates.
Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 5.4% since reporting. It currently trades at $87.
Is now the time to buy Elastic? Access our full analysis of the earnings results here, it's free.
Weakest Q1: Teradata (NYSE:TDC)
Part of point-of-sale and ATM company NCR from 1991 to 2007, Teradata (NYSE:TDC) offers a software-as-service platform that helps organizations manage and analyze their data across multiple storages.
Teradata reported revenues of $418 million, down 10.1% year on year, falling short of analysts' expectations by 2.4%. It was a mixed quarter as it posted an impressive beat of analysts' billings estimates but EPS guidance for next quarter missing analysts' expectations significantly.
Teradata delivered the weakest performance against analyst estimates and slowest revenue growth in the group. The stock is flat since the results and currently trades at $21.77.
Read our full analysis of Teradata's results here.
Confluent (NASDAQ:CFLT)
Started in 2014 by the team of engineers at LinkedIn who originally built it as an internal tool, Confluent (NASDAQ:CFLT) provides infrastructure software for organizations that makes it easy and fast to collect and move large amounts of data between different systems.
Confluent reported revenues of $271.1 million, up 24.8% year on year. This number surpassed analysts' expectations by 2.6%. Overall, it was a strong quarter as it also logged EPS guidance for next quarter exceeding analysts' expectations and a solid beat of analysts' EBITDA estimates.
Confluent achieved the biggest analyst estimates beat but had the weakest full-year guidance update among its peers. The stock is up 7.2% since reporting and currently trades at $25.48.
Read our full, actionable report on Confluent here, it's free.
Market Update
Thanks to the Fed's series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% in November), and a notable surge followed Donald Trump's presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by potential trade policy changes and corporate tax discussions, which could impact business confidence and growth. The path forward holds both optimism and caution as new policies take shape.
Want to invest in winners with rock-solid fundamentals? Check out our Hidden Gem Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
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