AI Stock Takes a Breather Before Earnings Call

Keep an eye on short sellers

Digital Content Manager
Dec 4, 2023 at 3:19 PM
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Artificial intelligence (AI) hotshot C3.ai (NYSE:AI) will announce fiscal second-quarter earnings after the close on Wednesday, Dec. 6. The security is up 170% so far in 2023, but has recently run into resistance at the $32 region. The 20-day moving average has served as a floor for shares since early November, however, containing several of their pullbacks. At last check, AI is down 2.2% at $30.22. 

AI 20 Day

The stock has a tumultuous history of post-earnings reactions. C3.ai stock finished five of its past eight next-day sessions lower, including 12.2% and 13.2% drops after its last two reports, but also saw a 33.6% pop in March. The shares averaged a move of 13.2% in the past two years, regardless of direction, but the options pits are pricing in a much larger-than-usual swing of 20.1% this time.

A positive post-earnings reaction this week could trigger a short squeeze. Short interest is already down 7.5% in the last two reporting periods, and the 35.11 million shares sold short make up a whopping 34.9% of the stock's available float. It would take shorts one week to buy back their bets, at AI's average pace of daily trading.

 

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