C3.ai Stock Drops Over 12% in 2025 Amid Revised Profitability Forecast and Increased AI Investments
C3.ai revises its profitability timeline for fiscal 2025 as it ramps up investments in generative AI technologies, impacting its stock performance despite strong revenue growth.
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Highlights
- C3.ai lowers its fiscal 2024 profitability expectations, triggering a more than 12% decline in shares.
- The company is intensifying investment in its generative AI product offerings to capitalize on market demand.
- CEO Thomas Siebel emphasizes a strategic focus on capturing expansive AI growth opportunities.
On Thursday, shares of C3.ai (AI) experienced a sharp decline exceeding 12% following the enterprise AI software developer’s announcement that profitability will be delayed due to increased spending on emerging AI technologies. Despite this, the company reported better-than-expected Q1 fiscal 2024 results, including a loss per share of $0.09, improved from the previous year, and revenue growth of 10.8% reaching $72.36 million, surpassing analyst forecasts.
However, the gross margin of 69% fell short of projections, reflecting the company’s strategic decision to allocate additional resources toward lead generation, brand enhancement, market awareness, and customer success initiatives focused on generative AI solutions. As a result, C3.ai now anticipates not achieving non-GAAP profitability by the end of the fiscal year, revising its earlier guidance.
Founder and CEO Thomas Siebel highlighted that while the AI market was expected to be substantial, the unprecedented scale and rapid growth have exceeded all forecasts. He affirmed that C3.ai has been preparing for this moment over the past 14 years and is committed to leveraging this momentum for future expansion.
Despite the recent stock decline, C3.ai shares have surged approximately 146% year-to-date, reflecting strong investor confidence in the company’s long-term AI strategy.
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