Shares of C3.ai (AI 3.02%) moved sharply higher Thursday morning, soaring by as much as 26.4%. As of 10:40 a.m. ET, the stock was still up by 24.3%.

The catalyst for that surge was the quarterly report it delivered after the close Wednesday, which revealed that the artificial intelligence (AI) specialist may finally be tapping into the widening adoption of AI.

The beginnings of a turnaround?

For its fiscal 2024 third quarter, which ended Jan 31, C3.ai generated revenue of $78.4 million, up 18% year over year. Subscription revenue grew even faster, up 23% to $70.4 million, accounting for 90% of the total. The results were further aided by the company's expanding gross profit margin of 58%, which edged higher from 56% in fiscal Q2.

Profits continued to be elusive. C3.ai booked a net loss of $72.6 million, resulting in an adjusted loss of $0.13 per share -- more than double its loss of $0.06 per share in the prior-year quarter.

To put those results into context, analysts' consensus estimates were calling for revenue of $76.1 million and a loss of $0.28 per share, so the company beat on both top and bottom lines.

Better days to come

C3.ai's results might not seem like much to celebrate, particularly given its worsening bottom-line losses. However, there are indications that better days could be coming as management increased its full-year guidance and investors let out a collective cheer.

The company cited the increasing number of new agreements it has signed with customers -- it inked 50 during the quarter, up 85% year over year. Of those, 29 were new pilots. Management expects these deals will translate into commercial revenue in the months and years to come.

For its fiscal 2024 fourth quarter, management forecasts revenue of between $82 million and $86 million, which would amount to growth of roughly 10% at the midpoint. For the full year, C3 is forecasting revenue of $306 million to $310 million, a year-over-year increase of about 15% at the midpoint. Most of that range tops analysts' consensus expectation for revenue of $306.2 million. However, as a result of its increasing investments, the company said its losses will continue, and it no longer expects to be profitable by the fiscal fourth quarter.

C3.ai still needs to show it can capitalize on the AI boom and turn a profit. Until it makes progress on those fronts, there are better AI stocks to choose from.