Skip to content Stock Price Rallied 21.4% on a $500 Million US DoD Contract. Should You Buy It?

Simon Mugo trader
Updated 10 Dec 2021

C3Ai Inc (NYSE: AI) stock price rallied 21.4% after signing a production- other transaction agreement (OTA) worth $500 million with the US Department of Defence to give them access to a suite of enterprise artificial intelligence products and services.

The OTA will provide an avenue for DOD organizations to procure company-made technology for modelling and simulation work.

The US government is its current client and uses its AI technologies for security clearance adjudication, data fusion, and predictive maintenance.

Thomas Seibel,’s CEO, said:

“We are thrilled to have been selected for these important initiatives and look forward to expanding our work and finding new ways to better serve the US federal government,”

He added that the departmentwide agreement supports research projects and production deployments.

Investors cheered the news, as evidenced by’s stock price rally. The company’s share price has fallen 76.87% this year, and many are hoping that today’s rally will trigger a longer-term uptrend.

Unlike other military contractors who deliver physical goods, is lucky to provide a service to the DOD; hence, its highest costs are labour and technology costs.

Therefore, the company is likely to have a higher operating margin than other contractors, which is excellent news for investors.

Long term investors interested in’s stock may find its current prices quite attractive following the significant drop in its share price since January.

*This is not investment advice. Always do your due diligence before making investment decisions.

C3Ai stock price.

Tradingview chart of stock price 10-12-2021
Source: Tradingview stock price rallied 21.35% to trade at $38.94, rising from Thursday’s closing price of $32.09.

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Simon has over six years of professional trading experience across FX, commodities and equities. He has a strong passion for financial markets and is particularly focused on price action trading