Shares of C3.ai received a significant boost following the release of Palantir's impressive quarterly report, indicating a growing demand for AI software solutions. The positive market sentiment towards AI technology is expected to drive healthy growth for C3.ai, making it an attractive investment opportunity.

Palantir Technologies, a leading provider of AI software solutions, saw a 30% surge in its stock after reporting solid results for the fourth quarter of 2023. This success also had a positive impact on C3.ai, with its shares gaining nearly 8% on the same day. The strong performance of both companies demonstrates the robust demand for AI software in the market.

Palantir's remarkable achievements include sealing 103 deals worth over $1 million each in the last quarter, indicating the increasing adoption of their AI Platform (AIP). The company's commercial customer count also jumped 44% year over year, resulting in a 32% increase in commercial revenue. These impressive figures highlight the healthy growth potential in the AI software market.

Although C3.ai has a long way to go before catching up to Palantir's market position, its current revenue figures and growth projections suggest it is still a promising contender. Palantir's revenue for 2023 was $2.23 billion, while C3.ai's revenue is expected to reach $306 million in the current fiscal year.

The enterprise AI market, where both companies operate, is projected to experience annual growth of 52% until 2029. According to Mordor Intelligence, it is expected to generate annual revenue of $204 billion by the end of the forecast period. This vast addressable market offers ample opportunities for C3.ai to expand its business in the long run.

C3.ai has undergone a business model transition in the past year and a half, switching from a subscription-based model to a pay-as-you-go approach. While this change initially impacted their revenue growth, C3.ai is now witnessing an improvement in deal activity and customer spending. The completion of this transition and the upcoming phase are expected to result in significant revenue growth and an improved margin profile.

Analysts anticipate C3.ai's revenue to grow by 15% in fiscal 2024, with further acceleration in the following years. Moreover, C3.ai's earnings are projected to increase at an annual rate of 50% for the next five years, showcasing the company's strong growth potential.

Investors seeking an AI software play may consider C3.ai as an alternative to Palantir, particularly considering the latter's high valuation. While Palantir currently commands a price-to-sales ratio of 22.6, C3.ai's ratio stands at 10.5, indicating a relatively more affordable investment opportunity.

In conclusion, C3.ai's shares received a boost from Palantir's strong quarterly report, reflecting the surging demand for AI software solutions. With a growing market and a favorable business model transition, C3.ai has the potential for healthy growth and presents an attractive option for investors seeking exposure to the AI software market.