Artificial intelligence (AI) pioneer Nvidia is set to release its fiscal 2026 first-quarter results after the market closes on May 28, and analysts and investors will be waiting to see how the chip giant fares considering the central role it plays in the AI space.
Nvidia's chips power AI data centers from the world's leading cloud computing companies. The company's graphics processing units (GPUs) are also in solid demand from governments looking to shore up their AI infrastructure. So, a closer look at Nvidia's results and outlook will help us understand the direction in which the AI market is headed.
However, there's another company that's benefiting from the fast-improving adoption of AI and will release its fiscal 2025 fourth-quarter results on May 28 -- C3.ai (AI 2.27%). The company provides enterprise AI solutions to both government and enterprise customers, but it has endured a difficult 2025 so far.
C3.ai stock is down 33% this year. However, its upcoming quarterly report could help turn its fortunes around and send the stock soaring.
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Fast-growing generative AI software demand can help C3.ai deliver solid results
The generative AI software market was worth an estimated $10 billion in 2023, but it is expected to jump to a whopping $176 billion in 2030, according to ABI Research. The company points out that the integration of generative AI software in enterprise use cases is likely to generate $434 billion in value annually by the end of the decade.
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That's not surprising as this technology is helping companies boost productivity and improve the efficiency of their operations. C3.ai is benefiting from the growing adoption of generative AI software. The company expects to report $389 million in revenue for the recently concluded fiscal year, which would be a 25% increase over the prior year. It is worth noting that C3.ai's annual top-line growth is projected to accelerate by 9 percentage points in the latest fiscal year.
This can be attributed to the improving demand for C3.ai's AI software solutions. The company provides more than 130 turnkey applications that could be deployed across a wide range of industries, while also offering an AI development platform to customers, using which they can build and deploy AI agents and applications.
Importantly, customer interest in C3.ai's AI software offerings has been picking up, which explains the improvement in its growth rate in the recent fiscal year. For instance, C3.ai closed 66 agreements in the third quarter of fiscal 2025 (which ended on Jan. 31), an increase of 72% from the year-ago period. These included 50 pilot projects. If C3.ai manages to convert a significant chunk of those pilot projects into actual contracts, it could end up delivering better-than-expected growth when it releases its results later this month.
What's worth noting is that C3.ai has exceeded Wall Street's bottom-line estimates by big margins in each of the last four quarters. The company isn't profitable yet, but its losses have been much lower than analysts' expectations of late. C3.ai is projected to end fiscal 2025 with an estimated loss of $0.44 per share. The good part is that its loss is expected to shrink in the future.
AI EPS Estimates for Current Fiscal Year data by YCharts
The potential growth in C3.ai's customer base, along with an increase in spending by the company's existing customers, could allow it to reduce its losses at a faster pace. All this indicates that C3.ai may be able to top expectations when it releases its quarterly results later this month. Moreover, the fast-improving demand for generative AI software and the big jump in the number of agreements that it struck in the last reported quarter could be enough for it to deliver stronger-than-expected guidance.
The valuation makes the stock a solid buy right now
It is worth noting that C3.ai has already jumped 19% in the past month, and more upside cannot be ruled out as a combination of strong results along with impressive guidance could give it a shot in the arm. Additionally, analysts have increased their expectations for the current and the next fiscal year, indicating that they are expecting its momentum to continue.
AI Revenue Estimates for Current Fiscal Year data by YCharts
All this makes C3.ai a solid buy going into its quarterly report. It is currently trading at 8 times sales, which is lower than its price-to-sales ratio of 12 at the end of 2024. So, investors can buy this AI stock at a relatively cheaper valuation right now, and doing so could turn out to be a smart move considering that it could zoom higher after May 28.
