AI Stocks: C3.ai, Palantir Pull Back Amid HPE, Cybersecurity, Cloud AI News

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The big rally in artificial intelligence stocks may finally be taking a break but the steady drumbeat in AI news continues. Shares in software firms C3.ai (AI) and Palantir (PLTR), two of the hottest AI stocks in 2023, have traded down since June 16.

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AI stock retreated after a C3.ai investor day on Thursday as the software maker didn’t announce any new AI customers. AI stock fell 10.8% to close at 33.39 on the stock market today. PLTR stock dipped a fraction to 14.03.

“C3 shared a number of stats to indicate robust customer activity levels during the current quarter,” JPMorgan analyst Pinjalim Bora said in a report.

“The company referred to ‘significant interest’ from customers for engaging in pilots, with C3 closing three times as many pilots quarter-to-date in fiscal Q1 (July) as compared to the same period last quarter,” he said.

Bora added: “Net/net, while we are encouraged by the traction in the business around pilots, we are waiting to see proof points around conversion of the pilots to underwrite the assumptions around the consumption-based pricing model.”

AI Stocks Still In Rarefied Air

A pullback in AI stock and PLTR stock could have been expected after recent gains. AI stock was up 234% in 2023 as of Thursday’s market close. PLTR stock has advanced 118%.

Palantir and C3.ai aren’t alone in the recent declines. Shares in computer networking firm Arista Networks (ANET), also among hot AI stocks, are down about 14% since May 30. And, shares in chipmaker Nvidia (NVDA) have been flattish for about a week.

AI Stocks: HPE Orders Pick Up

Meanwhile, Hewlett Packard Enterprise (HPE) is partnering with German startup Aleph Alpha to bring AI capabilities to its cloud-based GreenLake data analytics service. Aleph Alpha has developed Luminous, a large language model. LLMs are key to the rise of generative AI.

HPE GreenLake for Large Language Models will provide customers with the ability to upload their own data to train and tune their own customized AI models. The new AI service will run on HPE Cray supercomputers. HPE announced the AI public cloud service at its Discover 2023 conference in Las Vegas on Tuesday.

The AI service is available to a few customers now. It will be widely available in North America in late 2023 and in Europe in 2024.

HPE said its AI product pipeline now has $3 billion in orders, up from $800 million last quarter.

Startup Vectra AI Gaining Share

Meanwhile, privately held cybersecurity firm Vectra AI hosted an online webinar that briefed Wall Street analysts on its AI-driven threat detection and response platform. Vectra competes with Palo Alto Networks (PANW), CrowdStrike Holdings (CRWD) and others in the XDR market. XDR is short for “extended detection and response.”

And, Vectra has been gaining share, Wall Street analysts say. During its presentation, Vectra management disclosed that Vectra has over 1,000 customers and generates “north of $100 million” in annual recurring revenue. Vectra’s last capital raise took place in April 2021 and valued the company at $1.2 billion. Vectra didn’t announce any plans for an initial public offering.

Elsewhere, Cisco Systems (CSCO) announced the fourth-generation of its Silicon One family of cloud computing network devices. “The chips are targeted at AI use cases and are currently being tested by five or six major hyperscalers,” Evercore ISI analyst Amit Daryanani said in a report.

Hyperscalers are large cloud service providers including tech giants like Facebook parent Meta Platforms (META). The new Cisco AI devices are the Silicon One G200 and the Silicon One G202 networking chips.

SandboxAQ Out Of Stealth Mode

Meanwhile, the cloud computing unit of Alphabet‘s (GOOGL) Google also had AI news. Google Cloud launched an AI-based service for financial companies to detect money laundering.

Lastly, startup SandboxAQ announced that AstraZeneca (AZN), Sanofi (SNY) and some other biopharma companies are using AI- and quantum-powered solutions from its new molecular simulation division, AQBioSim.

Spun off by Google in 2022, SandboxAQ said it’s also working with UC San Francisco’s Institute for Neurodegenerative Diseases and other university research labs. Quantum computing services are available to researchers from Google and Amazon Web Services, the cloud unit of Amazon.com (AMZN).

But commercial quantum computing could still be a decade off.

Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.

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