Shares of C3.ai (AI) experienced a decline on Thursday. By 2:10 p.m. ET, the stock had fallen by 6.4%, although it had dipped as much as 10.3% earlier in the day. This occurred while the S&P 500 remained relatively stable and the Nasdaq Composite recorded a 0.6% loss.
C3.ai, a company assisting businesses in utilizing artificial intelligence (AI), announced its fiscal 2025 Q3 earnings on Wednesday evening. Following the release, several prominent analysts adjusted their ratings.
Earnings Performance
The company reported a loss of $0.12 per share on sales of $98.8 million, surpassing the consensus estimate of a $0.24 loss on $98.01 million in sales. The $98.8 million in sales reflects a 26% increase compared to the same period in the previous year.
Despite the positive aspects, investors appeared less enthusiastic. They may have been anticipating year-over-year (YOY) sales growth that aligned with or surpassed the 28.3% YOY growth achieved in the prior quarter.
CEO Thomas Siebel expressed optimism, stating that C3.ai had “achieved significant milestones” and was “on the verge of building one of the world’s great companies.”
Analyst Reactions
Several analysts subsequently revised their price targets for C3.ai. For example, KeyBanc Capital Markets maintained its underweight rating and reduced its price target from $29.00 to $21.00 for C3.ai. Analysts highlighted concerns regarding C3.ai’s revenue composition.
The company witnessed a significant surge in demonstration licenses, increasing by 50% quarter over quarter. While some of these licenses may convert into full subscriptions, this revenue stream is non-recurring, introducing uncertainty into C3.ai’s growth outlook.
