C3.ai, Inc. is an enterprise artificial intelligence application software company operating in North America, Europe, the Middle East, Africa, the Asia Pacific, and internationally. Its offerings include the C3 Agentic AI Platform, an application development and runtime environment for designing, developing, and deploying enterprise AI applications; C3 AI Studio, an integrated development environment within that platform; C3 AI Applications, a portfolio of industry-specific enterprise AI applications; and C3 Generative AI, a library of agentic AI applications for retrieving data, analyzing information, surfacing insights, and orchestrating workflows. The company also provides C3 Code, which enables users to build, configure, and deploy production-grade enterprise AI applications automatically, including data pipelines, AI models, business logic, security controls, and user interfaces. It has strategic partnerships with Microsoft, AWS, Google Cloud, McKinsey & Company, and Baker Hughes. Formerly known as C3 IoT, Inc., it changed its name to C3.ai, Inc. in June 2019, was incorporated in 2009, and is headquartered in Redwood City, California.
C3.ai's turnaround: bookings up, revenue still falling
▲
Bookings jump 73% and cash turns positive C3.ai's fiscal Q1 2027 bookings rose 73% from the prior quarter, with 22 new deals including Ford, Johnson & Johnson and federal agencies. Free cash flow turned positive at $2.1 million, and a 40% headcount cut is saving about $135 million a year. This supports the stock by showing the turnaround is gaining traction.
This is the core new fundamental event of the period and the main reason the stock has a positive case.
▼
Revenue still shrinking and guidance disappoints Revenue of $52.4 million fell about 25% from a year earlier, and next-quarter guidance of $53 million missed analyst estimates by 8%. Management also said gross margin will slip back to the mid-40s next quarter. Falling sales and soft guidance weigh on the stock because they show the business is still shrinking.
This is the main counterweight to the turnaround story and explains why the stock did not rally more.
▼
Competitors like Palantir and Snowflake are growing much faster Palantir's commercial revenue more than doubled to $945 million, and Snowflake's product revenue rose 37% to $1.49 billion, while C3.ai's revenue fell. This contrast makes C3.ai look like a laggard in the AI software race, pressuring its stock as investors favor faster-growing peers.
It shows the competitive backdrop that makes C3.ai's shrinking revenue a bigger problem for investors.
◆
Heavy short selling shows deep investor skepticism Short interest stood at 42% of the shares available to trade, meaning many investors are betting the stock will fall. That can amplify moves in either direction, but it reflects real doubt about whether C3.ai can restore growth. It is a structural overhang on the stock.
It explains the market's persistent skepticism and why positive news has not lifted the stock more.
Q3 2026
▼3▲1
C3.ai's Turnaround Faces Deep Skepticism as Revenue Plunges
▼
Revenue collapse and margin erosion Revenue fell 36% in FY2026 and gross margin dropped from 62% to 22%, with free cash flow at negative $192 million. FY2027 guidance implies further shrinkage, raising doubts about the business's stability.
This point explains the core financial deterioration that pressured the stock.
▲
Early turnaround signs emerge Q1 FY2027 bookings jumped 73% with new deals from Ford, J&J, and federal agencies. Free cash flow turned positive at $2.1 million, and a 40% headcount cut saves about $135 million annually.
This point highlights the positive operational changes that could support a recovery.
▼
CEO health absence and sales disruption CEO Thomas Siebel's health-related absence caused sales to 'fall off a cliff,' though he returned in June. The disruption added uncertainty during an already challenging period.
This point identifies a key leadership risk that hurt sales and investor confidence.
▼
Intense competition and high short interest Competitors like Palantir and Snowflake are growing far faster, while short interest at 42% signals deep skepticism. Fed rate uncertainty adds pressure, making the turnaround harder.
This point captures external competitive and market pressures that weigh on the stock.
News & notes movingAI
United States
Artificial Intelligence▼impact 4
Palantir Commercial Revenue Jumps 110% to $945 Million in Q2 2026
Palantir Technologies' commercial revenue surged 110% to $945 million in the second quarter of 2026, more than doubling the $451 million recorded a year earlier. The commercial segment added $494 million year over year, expanding by more than its entire year-earlier base, while government revenue rose 79% to $990 million from $553 million. Combined, the two businesses generated $1.94 billion in second-quarter 2026 revenue, up from roughly $1 billion a year earlier, with commercial operations contributing more than half of the combined year-over-year increase and narrowing the gap with government revenue to just $45 million. Among peers, C3.ai reported fiscal fourth-quarter 2026 revenue of $51.6 million, down substantially year over year, and forecast fiscal 2027 revenue of $210-$240 million, while Datadog's second-quarter 2026 revenue rose 36% to $1.12 billion, with customers contributing at least $100,000 in ARR up 23% to roughly 4,720 and free cash flow of $279 million. Palantir shares have gained 37% over the past three months against 19% industry growth, and the stock trades at a forward price-to-sales ratio of 39.96X versus an industry average of 4.2X, carrying a Value Score of F and a Zacks Rank #1 (Strong Buy).
Artificial Intelligence › Agentic AI & Autonomous Workflows ▲Demand
Artificial Intelligence › AI Applications & Copilots Competition
PLTR · Demand · Positive Palantir's commercial revenue surged 110% to $945 million and government revenue rose 79%, driving total Q2 2026 revenue to $1.94 billion.
AI · Demand · Negative C3.ai reported fiscal Q4 2026 revenue of $51.6 million, down substantially year over year, with weak fiscal 2027 guidance.
DDOG · Demand · Positive Datadog's Q2 2026 revenue rose 36% to $1.12 billion with customers at $100,000+ ARR up 23%.
C3.ai Posts First-Quarter Fiscal 2027 Revenue of $52.4 Million as Turnaround Takes Hold
C3.ai reported its first quarter of fiscal 2027 on September 2, with total revenue of $52.4 million, subscription revenue of $49.2 million making up 94% of that total, and total bookings up 73% quarter over quarter. Chief Executive Officer Tom Siebel, three months back in the role, said the company had restored fundamental management discipline, and federal bookings grew 138% year over year as the Department of Defense budget is expected to climb from $1 trillion to $1.5 trillion. The company closed 22 enterprise agreements in the quarter, including deals with Ford Motor Company, Johnson & Johnson, Heidelberg Materials, Seaspan, and Holcim, alongside federal wins with the Defense Logistics Agency and the US Department of Agriculture. C3.ai cut headcount by 40% across the business and consolidated vendors, generating roughly $135 million in annualized savings, which helped non-GAAP gross margin jump from 37% the prior quarter to 50%, non-GAAP expenses fall by almost $40 million year over year to $88.5 million, and free cash flow turn positive at $2.1 million, compared with a $34.3 million outflow in the same period last year. The improvement has limits: CFO Hitesh Lath said non-GAAP gross margin is expected to slide back to the mid-40s next quarter, the quarter's GAAP net loss came to $92.8 million, or $0.60 per share, and the non-GAAP net loss was $30.7 million, or $0.20 per share, while second-quarter revenue is projected at $51 million to $55 million against a non-GAAP operating loss of $34.5 million to $42.5 million and the full fiscal 2027 outlook calls for revenue of $210 million to $240 million alongside a non-GAAP operating loss of $123 million to $155 million.
AI · Capital · Positive C3.ai's Q1 FY2027 results show revenue of $52.4M, gross margin jump to 50%, positive free cash flow, and $135M annualized savings from a 40% headcount cut.
AI · Demand · Positive Total bookings rose 73% QoQ with 22 enterprise agreements including Ford, J&J, and federal wins, and federal bookings grew 138% YoY.
Snowflake Surges 16.6% While C3.ai Gains 3.6% After Earnings
Snowflake and C3.ai both reported earnings after the September 2 close, but Snowflake's stock jumped 16.6% the next day while C3.ai gained only about 3.6%, highlighting a stark contrast in AI demand. Snowflake's fiscal second-quarter product revenue reached $1.49 billion, up 37%, with remaining performance obligations rising 30% to $9.0 billion and net revenue retention at 126%. The company also reported over 9,100 accounts using its CoCo coding agent and 5,800 using its CoWork enterprise agent, indicating AI is expanding consumption on its data platform. In contrast, C3.ai reported $52.4 million in revenue, positive free cash flow of $2.1 million, and a non-GAAP operating loss of $36.2 million, which improved 33% sequentially, but revenue still fell roughly 25% year over year. C3.ai's bookings rose 73% from the prior quarter, yet its short interest stood at 42.14% of float as of August 14, reflecting a structural bearish overhang. Snowflake's AI adoption is already scaling its consumption engine, while C3.ai must restore revenue growth and sustain margins to gain similar confidence.
C3.ai Reports 73% Bookings Growth and Positive Free Cash Flow
C3.ai reported strong Q1 FY27 results with 73% quarter-on-quarter bookings growth and a return to positive free cash flow. The company signed 22 new high-profile customer agreements in the quarter, including Ford and multiple U.S. government agencies. Federal sector bookings rose 138% year on year, while prior restructuring efforts contributed to steadier revenue and an improved operating loss profile. However, revenue fell to US$52.38 million from US$70.26 million a year earlier, and the company still posted a net loss of US$92.81 million. The key test is whether C3.ai can translate the bookings spike into steadier revenue and a smaller operating loss over the remaining FY27 quarters.
C3.ai Q2 Revenue Meets Estimates but Guidance Misses
C3.ai reported Q2 CY2026 revenue of $52.38 million, in line with Wall Street's expectations, but its quarterly revenue guidance of $53 million for next quarter fell 8% short of analysts' estimates. The company's non-GAAP loss of $0.20 per share beat consensus by 23.2%, and adjusted operating income of $36,200 significantly exceeded expectations. Revenue declined 25.5% year on year, and management reconfirmed full-year revenue guidance of $225 million at the midpoint. Following the results, the stock traded down 3.2% to $10.21.
Enterprise AI software company C3.ai will announce its quarterly earnings after the bell on Wednesday, with analysts expecting revenue to decline 25.7% year over year, a further deceleration from the 19.4% decrease recorded in the same quarter last year. In the previous quarter, C3.ai reported revenues of $51.6 million, down 52.5% year on year, beating analysts' revenue expectations but missing on billings estimates. Analysts have generally reconfirmed their estimates over the last 30 days, and the stock has risen 12% in the past month, trading at $10.90 against an average analyst price target of $8.82. Peers Elastic and Teradata have already reported their Q2 results, with Elastic growing revenue 15.1% and Teradata flat, both beating expectations.
Enterprise Software Stocks Surge on AI-Driven Earnings
Shares of enterprise software and SaaS companies, including Appian, Atlassian, Bandwidth, C3.ai, and Dynatrace, soared in afternoon trading after quarterly earnings and upbeat commentary signaled that artificial intelligence is driving growth rather than threatening legacy business models. The sector-wide rally was fueled by strong results from Salesforce, CrowdStrike, and Okta, with Salesforce's AI-powered Agentforce reaching $1.5 billion in annual recurring revenue and Slackbot surpassing 1 million active users in five months. CrowdStrike's CEO attributed momentum to AI expanding the attack surface, while Okta reported that AI-focused offerings drove about 30% of new bookings and increased contract values by roughly 40%. Among the movers, Appian jumped 8%, Atlassian rose 9.1%, Bandwidth gained 10.1%, C3.ai climbed 7%, and Dynatrace advanced 4.3%, with Salesforce surging 20%.
C3.ai Revenue Collapses 36% as Wall Street Stays Bearish
C3.ai's fiscal 2026 revenue fell 35.67% to $250.27 million, with fourth-quarter revenue down 52.5% year over year to $51.60 million. GAAP gross margin collapsed from 62% to 22%, and full-year free cash flow deteriorated to negative $192.14 million. Founder Thomas Siebel, who returned as CEO in June and personally bought 6.17 million shares at $11.16, called the recent sales performance 'unspeakably horrible' and said 'sales just fell off the cliff' across the last five quarters. Wedbush Securities analyst Dan Ives maintains a Street-high $15 price target, implying roughly 47% upside from the current $10.18, but 13 of 14 analysts rate the stock Hold or worse with a consensus target of $8.82, implying about 13% downside. The company's FY2027 revenue guidance of $210 million to $240 million implies further shrinkage before recovery, while peers Palantir and SoundHound AI posted revenue growth of 92.8% and 45% respectively in their latest quarters.
C3.ai Revenue Plunges After CEO Health Leave, Salesforce Posts Strong AI Growth
C3.ai’s revenue floundered after CEO Thomas Siebel resigned from the position due to health issues. The company announced his return in June, as it posted fiscal fourth quarter sales of $51.6 million, a substantial drop from the prior year’s $108.7 million. For its full fiscal year 2026 ended April 30, revenue fell 35.7% to $250.3 million, contributing to a net loss of $470.4 million. Meanwhile, Salesforce reported fiscal 2026 revenue of $41.5 billion, up 9.6%, with net income of $7.5 billion, and its Agentforce AI annual recurring revenue surged over 200% to $3.4 billion in the fiscal first quarter. The article concludes that Salesforce’s healthier financials and lower valuation make it the better investment compared to struggling C3.ai.
C3.ai Secures Full Dismissal of Securities Class Action
C3.ai, Inc. has secured a full dismissal of a putative securities class action in the U.S. District Court for the Northern District of California, removing all asserted claims against the company and certain officers. The legal outcome reduces uncertainty around C3.ai's operations and may influence how investors assess its risk profile. The dismissal comes alongside recent quarterly results where revenue and EPS exceeded analyst expectations, though the company still posted a sizeable net loss. Management now faces fewer legal distractions while working to address revenue pressure, partner dependence, and the effort to convert pilots into larger recurring deployments.
C3.ai CEO Thomas Siebel sold $4.2 million in shares under a pre-scheduled trading plan
C3.ai CEO Thomas Siebel sold 462,565 shares for $4.2 million on July 14 and 15, 2026, under a pre-scheduled Rule 10b5-1 trading plan adopted in September 2024. The transactions involved exercising options at $3.90 per share and immediately selling the resulting stock at a weighted average price of $9.18. Following the sales, Siebel retains 722,362 directly held shares, approximately 1.5 million indirectly held shares through four entities, and nearly 2.9 million derivative securities, representing about a 1% ownership stake. C3.ai stock is down because its revenue fell after Siebel resigned from the CEO position due to health issues, and the company announced his return in June. The stock had a negative 66% one-year total return as of the July 15 close, with fiscal 2026 revenue dropping to $250.3 million from $389.1 million the prior year.
A 1950s Stock Checklist Just Predicted AI’s Regulatory Reckoning in 2026
A 1950s stock checklist by T. Rowe Price is being used to argue that AI companies face a regulatory reckoning. On The Investing for Beginners Podcast, co-host Stephen Morris warned investors away from AI stocks likely to face government regulation, citing Price's framework that avoided companies furnishing necessities of life due to socialistic pressure on profits. Prediction markets show a 27.5% chance the US government removes public access to another major AI model in 2026, and a 21.5% chance for a Chinese model restriction. NVIDIA exemplifies the tension with an 85% revenue surge to $81.61 billion but lost China revenue to export controls, while C3.ai's 52% revenue collapse and negative margins show what happens when the checklist fails. Microsoft sits between the extremes with 18% revenue growth and a 46% operating margin, and Procter & Gamble's 70th consecutive dividend increase and 31% ROE exemplify the stable growth the checklist was designed to find.
Artificial Intelligence › Foundation Models & Research Labs ▼Regulation
Artificial Intelligence › AI Compute & Accelerator Silicon ▼Regulation
AI · Regulation · Negative Article uses C3.ai as example of checklist failure with 52% revenue collapse and negative margins, implying regulatory risk.
NVDA · Tariff · Negative NVIDIA's lost China revenue to export controls cited as example of regulatory/tariff risk.
PG · Capital · Positive Procter & Gamble's 70th consecutive dividend increase and 31% ROE exemplify stable growth the checklist seeks.
MSFT · · Neutral Microsoft mentioned as sitting between extremes with 18% revenue growth and 46% margin, but no direct regulatory impact stated.
C3.ai CEO Tom Siebel Returns Amid Sharp Revenue Decline and Extended Shell Partnership
C3.ai reported a sharp revenue decline in 2026 alongside the temporary step-down and subsequent return of CEO Tom Siebel, while extending its enterprise AI collaboration with Shell. The multi-year extension reinforces C3.ai's relevance in complex industrial AI deployments, showing major customers still commit to its platform even as competition from BigBear.ai intensifies. Siebel's return may help stabilize operations, but the revenue trend remains the key near-term swing factor for the stock's risk-reward. The company's narrative projects $269.8 million revenue and $32.7 million earnings by 2029, requiring 2.5% yearly revenue growth and about a $503 million earnings increase from negative $470.4 million today.
Artificial Intelligence › AI Applications & Copilots Competition
AI · Demand · Negative Sharp revenue decline in 2026 indicates weakening end-customer demand for C3.ai's products.
SHEL.LSE · Demand · Positive Extended enterprise AI collaboration with Shell shows continued commitment to C3.ai's platform, positive for Shell's AI adoption.
BBAI · Competition · Positive Intensifying competition from BigBear.ai is mentioned, implying a potential gain for BigBear.ai.
C3.ai Stock Looks Overvalued on Cash Flow and Sales
C3.ai's stock appears overvalued based on both discounted cash flow and sales multiples. A discounted cash flow model estimates an intrinsic value of about $6.61 per share, implying the stock trades at a roughly 35.3% premium. On a price-to-sales basis, C3.ai trades at about 5.6 times, well above the software industry average of around 3.5 times and a peer group average near 1.6 times. The company's latest twelve-month free cash flow was a loss of $199.2 million, and it passes zero of six broad valuation checks. The key question is whether C3.ai can convert its partnerships and AI platform interest into durable, profitable cash flows quickly enough to justify the premium investors are paying.
C3.ai and BigBear.ai quarterly revenue trends show diverging paths
C3.ai and BigBear.ai have reported contrasting quarterly revenue trends, with C3.ai consistently generating higher overall revenue but experiencing a sharp decline in recent quarters, while BigBear.ai has remained more steady. C3.ai's revenue fell from $108.7 million in the quarter ended April 2025 to $51.6 million in the quarter ended April 2026, a drop attributed to the temporary departure of CEO Tom Siebel for health reasons. BigBear.ai's revenue has been more stable, with first-quarter 2026 revenue of $34.4 million representing only a 1% year-over-year decline, and the company forecasting full-year 2026 revenue between $135 million and $165 million. Investors are watching whether C3.ai can recover under Siebel's return and whether the revenue gap between the two companies will continue to narrow.
C3.ai CFO Hitesh Lath sold 34,210 shares for about $375,000
C3.ai Chief Financial Officer Hitesh Lath sold 34,210 shares of Class A Common Stock for approximately $375,000 on June 16, 2026. The sale represented 12.80% of his direct holdings, reducing his direct ownership from 267,316 to 233,106 shares. The transaction was executed to fulfill tax withholding obligations tied to the vesting of restricted stock units and involved option exercises with immediate sale. Following the sale, Lath directly holds 233,106 shares valued at roughly $2.55 million and maintains 352,077 restricted stock units. The sale occurred with shares priced around $10.95, against a one-year price decline of 55.3% as of that date.
Wix, C3.ai, and Unity Stocks Fall After Fed Dot Plot Signals End of Easing Cycle
Shares of Wix, C3.ai, and Unity declined in afternoon trading after the Federal Reserve held its benchmark rate at 3.5%–3.75% and released a dot plot that removed expectations for a 2026 rate cut, instead introducing the possibility of a hike. The median year-end rate estimate rose from 3.4% to 3.8%, pushing the 2-year Treasury yield up 11 basis points to 4.161% and reducing the present value of future cash flows for software companies. Wix fell 4.4%, C3.ai dropped 4.3%, and Unity lost 4.7%, with Unity now trading 45.9% below its 52-week high of $49.47 from December 2025.
AI · Monetary · Negative Fed dot plot signals end of easing cycle, raising rates and reducing present value of future cash flows for software companies like C3.ai.
U · Monetary · Negative Fed dot plot signals end of easing cycle, raising rates and reducing present value of future cash flows for software companies like Unity.
USA