C3.ai (AI -0.17%) emerged as a promising growth stock in artificial intelligence (AI) in 2023, when ChatGPT was still fairly fresh in the minds of investors. That year, shares of C3.ai rose by 157%. And while it still rallied another 20% last year, the hype has been fading fast. This year, the AI stock is down more than 30%.
Later this month, the company will post its year-end numbers. It could be a big day, as not only will C3.ai report on its performance during the last quarter, but it may also unveil its guidance for the new fiscal year ahead. Should you buy the stock before it releases its earnings on May 28?

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Why the stock could get a boost after earnings
C3.ai's business has been generating some solid growth in recent quarters. The growing popularity of AI and companies looking to it to transform their operations has undoubtedly given C3.ai's business a boost. Its growth rate has been on a strong trajectory since 2023.
AI Operating Revenue (Quarterly YoY Growth) data by YCharts
The company provides businesses with over 130 turnkey AI applications, which can be appealing for prospective customers when looking for ways to deploy AI quickly and efficiently. If C3.ai's growth rate accelerates in its most recent quarter or its guidance is strong, that could give investors a reason to pile money into this stock again.
Shares of C3.ai aren't at their lows anymore, but they are still down nearly 50% from their 52-week high of $45.08. Investors may be encouraged to take a position in the company, given how bearish the market has been on it of late. If it can post strong numbers and also show an improvement on the bottom line, the stock could be due for a big rally.
Why the stock might struggle after earnings
C3.ai's growth rate, has, for the most part, been accelerating over the past couple of years. But the fact that the AI stock isn't taking off is a sign that investors are concerned about more than just top-line growth. And a big part of the reason is a lack of profitability. In the past three years, the closest the company has come to breaking even was a quarterly loss of $63 million.
AI Net Income (Quarterly) data by YCharts
The business is scaling its operations, but it isn't doing so in a way that is getting it closer to profitability. This raises flags because it could be a sign that the business is relying heavily on promotions or discounts in order to win over customers.
If it's growing but not showing any improvement on the bottom line, it may be all for naught in the minds of investors. And my concern is that even if the business still shows good growth when it posts its latest numbers, there may not be a sufficient improvement in earnings to suggest that it is moving in the right direction, which could lead to more of a sell-off.
Should you invest in C3.ai stock?
C3.ai isn't a stock I'd buy today. The business may be growing, but profits will be under the microscope, especially amid fears of a slowdown in the economy coming this year and cheaper AI competitors emerging in China and other parts of the world. C3.ai hasn't shown that it can turn a profit under near-ideal conditions -- not a good sign at all, with potentially worse conditions ahead.
Investors are likely better off waiting until after C3.ai reports earnings before making a decision; there's no rush to buy it now, as this is still a very risky stock to own.