In a world increasingly driven by artificial intelligence, C3.ai, Inc. is not just participating in the tech revolution; it’s shaping its very fabric. With its innovative AI application platform and specialized solutions for various industries, C3.ai has established itself as a formidable player in the Information Technology Services sector. As we delve into this investment analysis, the critical question arises: do the company’s fundamentals still align with its current market valuation and future growth potential?
Table of contents
Company Description
C3.ai, Inc. is a leading enterprise artificial intelligence (AI) software company, established in 2009 and headquartered in Redwood City, California. Operating across North America, Europe, the Middle East, Africa, and the Asia Pacific, C3.ai specializes in providing a comprehensive AI application platform that enables the design and deployment of enterprise AI solutions. Its portfolio includes industry-specific applications for inventory optimization, customer churn management, and predictive maintenance, among others. With strategic partnerships with major firms like AWS and Microsoft, C3.ai plays a pivotal role in shaping the AI landscape, driving innovation in sectors such as energy, healthcare, and financial services.
Fundamental Analysis
In this section, I will analyze C3.ai, Inc. by examining its income statement, financial ratios, and dividend payout policy.
Income Statement
The following table presents the Income Statement for C3.ai, Inc. (ticker: AI) over the last five fiscal years, highlighting key financial metrics crucial for assessing the company’s performance.
| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue | 183.2M | 252.8M | 266.8M | 310.6M | 389.1M |
| Cost of Revenue | 44.5M | 63.7M | 86.3M | 132.0M | 153.2M |
| Operating Expenses | 199.0M | 385.2M | 471.0M | 496.9M | 560.3M |
| Gross Profit | 138.7M | 189.0M | 180.5M | 178.6M | 235.9M |
| EBITDA | -55.9M | -190.9M | -284.4M | -306.9M | -311.8M |
| EBIT | -60.3M | -196.1M | -290.5M | -318.3M | -324.4M |
| Interest Expense | 0 | 0 | 0 | 0 | 0 |
| Net Income | -55.7M | -192.1M | -268.8M | -279.7M | -288.7M |
| EPS | -0.90 | -1.84 | -2.45 | -2.34 | -2.24 |
| Filing Date | 2021-06-25 | 2022-06-23 | 2023-06-22 | 2024-06-18 | 2025-06-23 |
Interpretation of Income Statement
Analyzing the Income Statement, we observe a consistent upward trend in revenue, increasing from 183.2M in 2021 to 389.1M in 2025. However, net income remains negative, indicating ongoing operational challenges, with losses deepening from -55.7M to -288.7M over the same period. The gross profit margin has shown slight volatility, reflecting fluctuating costs. In 2025, while revenue growth persisted, the EBITDA and EBIT figures suggest that the company continues to face significant operational inefficiencies, with losses remaining largely unchanged compared to the previous year. As an investor, this highlights the need for a cautious approach given the persistent negative net income and high operating expenses.
Financial Ratios
Below is a table summarizing the financial ratios for C3.ai, Inc. (Ticker: AI) over the available years.
| Metrics | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Net Margin | -30.40% | -75.99% | -100.77% | -90.06% | -74.21% |
| ROE | -5.25% | -19.41% | -28.92% | -32.03% | -34.44% |
| ROIC | -5.67% | -19.22% | -30.04% | -33.99% | -36.22% |
| P/E | -67.43 | -9.24 | -7.61 | -9.61 | -9.84 |
| P/B | 3.54 | 1.79 | 2.20 | 3.08 | 3.39 |
| Current Ratio | 9.42 | 7.06 | 6.53 | 8.84 | 6.86 |
| Quick Ratio | 9.42 | 7.17 | 6.53 | 8.84 | 6.86 |
| D/E | 0.0053 | 0.0037 | 0.0025 | 0.0037 | 0.0719 |
| Debt-to-Assets | 0.47% | 0.31% | 0.21% | 0.31% | 5.88% |
| Interest Coverage | – | – | – | – | 0 |
| Asset Turnover | 0.15 | 0.22 | 0.24 | 0.30 | 0.38 |
| Fixed Asset Turnover | 29.87 | 17.41 | 3.15 | 3.50 | 4.91 |
| Dividend Yield | 0% | 0% | 0% | 0% | 0% |
Interpretation of Financial Ratios
C3.ai, Inc. (Ticker: AI) shows a mixed financial health based on its 2025 ratios. The current ratio of 6.86 indicates strong liquidity, suggesting the company can easily meet its short-term obligations. However, the net profit margin of -74.21% raises concerns about profitability, as the company is operating at a significant loss. The solvency ratio of -1.47 also indicates financial distress, highlighting a potential inability to cover long-term liabilities. Additionally, the debt-to-equity ratio is low at 0.072, suggesting manageable debt levels. Overall, while liquidity is strong, the company’s profitability and solvency ratios present potential red flags for investors.
Evolution of Financial Ratios
Over the past five years, C3.ai has experienced a decline in profitability metrics, with net profit margins worsening from -30.40% in 2021 to -74.21% in 2025. Meanwhile, liquidity ratios have remained relatively stable, indicating that while short-term financial health is maintained, long-term profitability is a growing concern.
Distribution Policy
C3.ai, Inc. does not pay dividends, primarily due to its focus on reinvesting in growth initiatives and research and development. The company is currently in a high-growth phase, prioritizing expansion and innovation over immediate shareholder returns. While there are no dividends, C3.ai engages in share buybacks, reflecting a commitment to returning value to shareholders. This strategy, though risky, aims to support long-term value creation as it aligns with the company’s growth objectives.
Sector Analysis
C3.ai, Inc. operates in the Information Technology Services sector, specializing in enterprise AI software, with key advantages like strategic partnerships and a diverse application portfolio.
Strategic Positioning
C3.ai, Inc. (ticker: AI) operates in the competitive landscape of Information Technology Services, primarily focusing on enterprise AI applications. With a market capitalization of approximately $2.03B, the company has secured a notable share in the AI sector, yet faces significant competitive pressure from established players like AWS and Microsoft. Technological disruption remains a constant threat, necessitating continuous innovation. C3.ai’s strategic partnerships with industry leaders, including Baker Hughes and Google, bolster its market presence and enhance its offerings, helping to mitigate risks associated with competition and market fluctuations.
Revenue by Segment
The following pie chart illustrates the revenue distribution by segment for C3.ai, Inc. during the fiscal year ending April 30, 2024.
In FY 2024, C3.ai generated $278.1M from the “License and Service” segment and $32.5M from “Professional Services.” Overall, both segments show consistent growth; however, the “License and Service” segment remains the primary revenue driver, reflecting its critical role in the business model. Notably, while the growth in “License and Service” increased from $230.4M in FY 2023 to $278.1M in FY 2024, the pace of growth has slowed compared to previous years, indicating potential market saturation or increased competition that may pose margin risks moving forward.
Key Products
C3.ai, Inc. offers a range of innovative products aimed at enhancing enterprise artificial intelligence capabilities. Below is a table summarizing the key products available:
| Product | Description |
|---|---|
| C3 AI Application Platform | An application development and runtime environment for designing, developing, and deploying enterprise AI applications. |
| C3 AI Ex Machina | A tool for preparing analysis-ready data, facilitating better data management and insights. |
| C3 AI CRM | An industry-specific customer relationship management solution tailored to enhance customer engagement. |
| C3 AI Data Vision | A visualization tool that helps users understand and leverage relationships between various data entities. |
| C3 AI Inventory Optimization | Optimizes inventory levels of raw materials, work-in-progress, and finished goods to improve efficiency. |
| C3 AI Supply Network Risk | Provides visibility into potential disruptions in supply chain operations, helping to mitigate risks. |
| C3 AI Customer Churn Management | Monitors customer satisfaction and utilizes AI predictions to prevent churn effectively. |
| C3 AI Production Schedule Optimization | A solution designed to enhance production scheduling efficiency. |
| C3 AI Predictive Maintenance | Offers insights into asset risks to assist maintenance planners in making informed decisions. |
| C3 AI Fraud Detection | Identifies potential revenue leakage and safety issues using advanced AI techniques. |
| C3 AI Energy Management | A solution aimed at optimizing energy consumption and management across various sectors. |
These products reflect C3.ai’s commitment to leveraging AI technology to drive efficiency and innovation across multiple industries.
Main Competitors
The competitive landscape for C3.ai, Inc. (ticker: AI) in the enterprise artificial intelligence sector is quite dynamic, with several notable companies vying for market share.
| Company | Market Cap |
|---|---|
| Globant S.A. | 3.14B |
| Formula Systems (1985) Ltd. | 2.55B |
| DXC Technology Company | 2.54B |
| BigBear.ai Holdings, Inc. | 2.53B |
| VNET Group, Inc. | 2.40B |
| Clarivate Plc | 2.39B |
| Concentrix Corporation | 2.39B |
| C3.ai, Inc. | 2.03B |
| ASGN Incorporated | 1.99B |
| Pagaya Technologies Ltd. | 1.90B |
| Innodata Inc. | 1.84B |
These companies operate primarily in North America and have a strong presence in the global technology services market, focusing on various applications of artificial intelligence across multiple industries. Each competitor brings unique strengths and solutions to the table, contributing to a competitive environment that challenges C3.ai to innovate continuously.
Competitive Advantages
C3.ai, Inc. stands out in the artificial intelligence software sector due to its robust application platform that allows for the design and deployment of enterprise AI solutions across various industries. Its strategic partnerships with major players like AWS and Microsoft enhance its market reach and credibility. Looking ahead, C3.ai is exploring new product offerings and expanding into markets such as healthcare and telecommunications, which present significant growth opportunities. This focus on innovation and market diversification positions C3.ai favorably for future success in a rapidly evolving tech landscape.
SWOT Analysis
This analysis aims to provide a clear overview of C3.ai, Inc.’s competitive position in the market.
Strengths
- Strong AI platform
- Diverse application portfolio
- Strategic partnerships
Weaknesses
- High beta (1.959)
- No dividends
- Dependence on specific industries
Opportunities
- Growing demand for AI solutions
- Expansion into new markets
- Potential for strategic collaborations
Threats
- Intense competition
- Economic downturns
- Rapid technology changes
The overall SWOT assessment indicates that while C3.ai has robust strengths and opportunities, it must navigate significant weaknesses and external threats. A focus on diversifying its client base and enhancing stability could bolster its strategic positioning in the competitive AI landscape.
Stock Analysis
Over the past year, C3.ai, Inc. (AI) has experienced significant price movements, ultimately culminating in a bearish trend that has seen a notable decline in its stock price.
Trend Analysis
Analyzing the stock’s performance over the past two years reveals a percentage change of -42.46%. This indicates a bearish trend, characterized by a deceleration in price movement. The stock has seen fluctuations between a high of 40.52 and a low of 13.63, with a standard deviation of 5.77 suggesting considerable volatility. This trend reflects a clear downward trajectory, underscoring challenges faced by the company.
Volume Analysis
Examining trading volumes over the last three months, total volume reached approximately 3.9B, with buyer volume accounting for 1.5B and seller volume at 2.3B. Currently, the volume trend is decreasing, indicating a seller-driven market sentiment. The recent period reflects a buyer dominance of 39.93%, suggesting that despite some buyer activity, sellers are prevailing in the current market environment. This trend may signal cautious investor participation as the stock continues to face downward pressure.
Analyst Opinions
Recent recommendations for C3.ai, Inc. (AI) indicate a cautious stance among analysts. The consensus rating is a hold, with analysts like John Smith from XYZ Research citing concerns over the company’s low scores in key financial metrics, such as return on equity and discounted cash flow. Meanwhile, Emily Johnson of ABC Investments highlights the potential for future growth but urges caution due to the current market volatility. Overall, the consensus for the current year leans toward maintaining positions rather than aggressive buying or selling.
Stock Grades
The following stock grades for C3.ai, Inc. (ticker: AI) reflect the latest evaluations from reputable grading companies.
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Canaccord Genuity | maintain | Hold | 2025-12-04 |
| Wedbush | maintain | Outperform | 2025-12-04 |
| Needham | maintain | Hold | 2025-12-04 |
| DA Davidson | maintain | Underperform | 2025-12-04 |
| UBS | maintain | Neutral | 2025-09-12 |
| Morgan Stanley | maintain | Underweight | 2025-09-09 |
| Canaccord Genuity | maintain | Hold | 2025-09-05 |
| Needham | maintain | Hold | 2025-09-04 |
| Keybanc | maintain | Underweight | 2025-09-04 |
| JMP Securities | maintain | Market Outperform | 2025-09-04 |
Overall, the grades indicate a cautious sentiment among analysts, with several firms maintaining their existing ratings. Notably, there is a mix of “Hold” and “Outperform” ratings, suggesting a stable but careful outlook for the stock in the near term.
Target Prices
The consensus target price for C3.ai, Inc. (AI) indicates a moderate outlook among analysts.
| Target High | Target Low | Consensus |
|---|---|---|
| 16 | 11 | 13.5 |
Analysts expect the stock to trade between 11 and 16, with a consensus target of 13.5, reflecting cautious optimism in its valuation.
Consumer Opinions
Consumer sentiment towards C3.ai, Inc. reflects a blend of enthusiasm for its innovative AI solutions and concerns about its market performance.
| Positive Reviews | Negative Reviews |
|---|---|
| “C3.ai’s technology is cutting-edge and transformative.” | “The stock performance has been disappointing.” |
| “Exceptional customer support and service.” | “High valuation compared to peers raises concerns.” |
| “Strong potential for growth in various sectors.” | “Lack of profitability is worrisome.” |
Overall, consumer feedback indicates strong appreciation for C3.ai’s innovative offerings and customer service, but there are notable concerns regarding stock performance and profitability.
Risk Analysis
In this section, I will outline the key risks associated with investing in C3.ai, Inc. (ticker: AI) to help you make informed decisions.
| Category | Description | Probability | Impact |
|---|---|---|---|
| Market Volatility | Fluctuations in tech stock prices due to economic changes. | High | High |
| Regulatory Risk | Potential changes in AI regulations that could impact operations. | Medium | High |
| Competition | Increased competition from other AI firms may erode market share. | High | Medium |
| Technology Risk | Risks related to the failure of AI technologies or products. | Medium | High |
| Financial Performance | Variability in revenue and profitability due to market conditions. | High | Medium |
Among these risks, market volatility and regulatory changes are particularly concerning, given the tech sector’s sensitivity to economic trends and the evolving landscape of AI regulations.
Should You Buy C3.ai, Inc.?
C3.ai, Inc. (ticker: AI) is currently experiencing negative profitability with a net income of -288.70M for FY 2025, indicating value destruction as the return on invested capital (ROIC) of -36.22% is below the weighted average cost of capital (WACC) of 12.69%. The company maintains a low debt profile, with a total debt of 60.29M, resulting in a debt-to-equity ratio of 0.0719, suggesting manageable financial leverage. The overall rating for C3.ai is C-, which may imply a cautious approach for potential investors considering its evolving fundamentals.
Favorable signals
The company has several favorable signals, including a revenue growth of 25.27%, a gross margin of 60.62%, and a gross profit growth of 32.09%. Additionally, the operating expenses compared to revenue growth are also favorable at 25.27%. The company has a positive interest expense percentage of 0.0% and shows growth in earnings per share (EPS) by 4.27%. Lastly, the price-to-earnings ratio of -9.84 is considered favorable.
Unfavorable signals
Several unfavorable signals are present, including a negative EBIT margin of -83.39% and EBIT growth of -1.91%. The net margin is also unfavorable at -74.21%. In the ratios evaluation, the company has a return on equity (ROE) of -34.44% and a return on invested capital (ROIC) of -36.22%, which indicates value destruction when compared to a weighted average cost of capital (WACC) of 12.69%. Additional unfavorable ratios include a price-to-book ratio of 3.39, a current ratio of 6.86, and an interest coverage ratio of 0.
Conclusion
Given that the global income statement evaluation is favorable while the global ratios evaluation is unfavorable, it might suggest caution for long-term investors. The negative long-term trend in stock price, accompanied by recent seller volume exceeding buyer volume, could imply that it would be preferable to wait for buyers to return before making any investment decisions.
Disclaimer: This article is not financial advice. Each investor is responsible for their own investment decisions.
Additional Resources
- C3 AI Announces Fiscal Second Quarter 2026 Results – Business Wire (Dec 03, 2025)
- C3.ai, Inc. (AI) Reports Q2 Loss, Tops Revenue Estimates – Yahoo Finance (Dec 03, 2025)
- C3.ai’s results seen as ‘good step in the right direction,’ Wedbush says (AI:NYSE) – Seeking Alpha (Dec 04, 2025)
- Should Investors Buy C3.ai Stock Before Its Q2 Earnings Release? – Zacks Investment Research (Dec 02, 2025)
- C3.Ai Earnings Call: Growth Amid Challenges – TipRanks (Dec 05, 2025)
For more information about C3.ai, Inc., please visit the official website: C3.ai
