Sure, food delivery service DoorDash (DASH) is set to skyrocket in its Wall Street debut Wednesday. But the artificial intelligence-powered software company C3.ai (AI) had a message for DoorDash -- hold my beer.
C3.ai soared more than 140% right out of the gate to above $100 a share after pricing its initial public offering at $42 -- well above its expected range of $36 to $38. C3.ai raised more than $650 million from the stock sale and is now worth around $9.5 billion.
C3.ai is not profitable, but like many other startups it is posting strong gains in revenue. Total sales were up more than 70% in C3.ai's most recent fiscal year -- and the company generates nearly all of its revenue from recurring subscriptions for its AI-powered business software.
Top customers include French utility Engie (ENGIY), oil services leader Baker Hughes (BKR) and Caterpillar (CAT). C3.ai also has a big backer -- Microsoft (MSFT). The software giant has agreed to buy a $50 million stake in the company at the IPO price.
IPOs (as well as companies going public through special purpose acquisition companies or SPACs) are in hot demand right now.
The scintillating debut for C3.ai also comes one day before Airbnb (ABNB) is set to go public. Some unicorns are choosing to directly list their shares too. That's how controversial big data firm Palantir (PLTR) went public.