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C3.ai, Inc. AI has seen a sharp downturn this year, falling beneath key industry benchmarks and triggering technical warning signs. C3.ai stock trades below its 50 and 200-day simple moving averages (SMAs), indicating challenges in sustaining the recent performance levels.
C3.ai Price Movement vs. 50-Day & 200-Day Moving Averages
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C3.ai Underperforms Industry, Sector
C3.ai shares have plunged 40.8% year to date amid growing recession concerns, underperforming the Zacks Computer & Technology sector’s decline of 14.9% and the Zacks Computers - IT Services industry’s decrease of 17%. As economic uncertainty looms, businesses may scale back on investments, including those in artificial intelligence (AI). That poses a risk for C3.ai, whose growth heavily depends on enterprise adoption of its AI solutions. Also, C3.ai faces headwinds, including continued operating losses and margin pressure from a pilot-heavy revenue mix. The costs associated with onboarding new partners, building enablement infrastructure, and supporting a larger global pipeline have temporarily been suppressing profitability.
At its current price, the AI stock represents a 54.8% discount from its 52-week high of $45.08. It also indicates a 19.7% premium to its 52-week low of $17.03.
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Amid persistent market volatility fueled by trade policy uncertainties, inflation concerns, and changing consumer sentiment, the question remains: can C3.ai continue to grow in the face of these headwinds?
C3.ai’s Estimate Revision Trend
The Zacks Consensus Estimate for C3.ai’s fiscal 2025 and 2026 loss per share has narrowed to 45 cents (from 62 cents) and 46 cents (from 55 cents), respectively, in the last 60 days. This reflects a positive shift in the analysts’ sentiment.
For fiscal 2025 and 2026, the Zacks Consensus Estimate for C3.ai’s sales implies a 29.7% and 22.4% growth, respectively. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
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Let’s explore the key factors that could spark a rebound for C3.ai.
Partnerships With Tech Giants Becoming a Major Revenue Engine
Strategic alliances remain the cornerstone of C3.ai’s go-to-market approach, and the fiscal third quarter validated the momentum in those partnerships. The company’s relationship with Microsoft Corporation MSFT produced impressive results. Since announcing their expanded alliance in late 2024, C3.ai closed 28 new deals through joint engagements, spanning nine industries. Sales cycles with Microsoft have shortened by approximately 20%, a testament to the strength of their joint go-to-market motions. As of the fiscal third-quarter end, C3.ai and Microsoft were engaged in more than 600 active enterprise opportunities globally.
Further extending its reach, C3.ai deepened its partnership with Amazon’s AMZN Amazon Web Services (AWS). Their collaboration is focused on delivering advanced enterprise AI solutions with an emphasis on execution speed and global scalability. Additionally, the newly forged relationship with McKinsey’s QuantumBlack division is intended to blend strategic consulting with C3.ai’s technology, equipping enterprise clients with both vision and AI-powered execution tools.
These collaborations underscore C3.ai’s transformation into a globally distributed AI company with the ability to scale sales and support through partner channels. According to the company, 71% of fiscal third-quarter agreements were facilitated through partner engagements.
C3.ai’s expanding footprint was reflected in its growing customer base. The company secured new or expanded agreements with major organizations, including GSK, Sanofi, ExxonMobil, Shell, Holcim, Quest Diagnostics, and the New York Power Authority. In the federal sector, C3.ai signed contracts with the U.S. Navy, Air Force, and the Missile Defense Agency, among others. The company also made inroads with multiple state and local governments, finalizing 21 deals in the quarter.