The company with the world’s most enviable stock ticker isn’t cashing in on AI
When your ticker is “AI,” people expect you to be riding the wave better than anyone else — but that hasn’t happened for C3.ai.
Executives in Corporate America are bending over backward to describe their products as “AI-powered” or “AI-driven,” desperate to join the hype train. Weirdly, the stock with the enviable “AI” ticker is going the opposite way.
C3.ai, a 16-year-old enterprise software firm that develops AI tools for businesses and government use, has fallen 34% in the past month — hit first by a weak preliminary forecast in August, followed by actual quarterly results on Wednesday, which founder Tom Siebel described as “completely unacceptable.”
For the quarter ended July 31, revenue fell 19% year over year to $70.3 million, missing forecasts by a mile; Wall Street was expecting somewhere north of $100 million, per Bloomberg. Losses, unsurprisingly, ballooned as well, with a net loss of nearly $117 million.
Indeed, since its 2020 IPO, the company has remained in the red, with losses continuing to widen.
C3.ai has rebranded several times since its founding in 2009: first as C3, focusing on carbon emissions tracking, then as C3 IoT in 2016 during the Internet of Things boom, and finally as C3.ai in 2019, pivoting to artificial intelligence. Shares popped after its IPO, but are now down ~90% from its peak, seriously missing the AI rally that’s defined the last two years.
Siebel blamed the weak quarter on the company’s disruptive sales overhaul, while also citing his own health issues. This week, the company appointed Stephen Ehikian as CEO, with Siebel staying on as executive chairman. Despite the miss, Siebel emphasized that C3.ai has an “extraordinarily large market opportunity, a superlative product offering, and exceptional levels of customer satisfaction.”
Still, analysts remain skeptical. Oppenheimer’s Timothy Horan warned the guidance may need to be reset lower, while Wedbush Securities’ Dan Ives called the last quarter “brutal” and cautioned of “darker days” if performance doesn’t improve.
Of course, AI isn’t a magic word that turns hype into profit. Though the frenzy around the tech has produced big winners, with Nvidia surpassing $4 trillion in market cap and Palantir transforming into a corporate behemoth thanks to a strong retail following, other names like Marvell, Adobe, and Salesforce are facing setbacks as their AI push has yet to meaningfully boost their bottom lines.
