C3.ai (AI 1.42%) got its start back in 2009 as a sustainability and energy management solutions business. It adjusted its business model a couple of times in the decade that followed, finally settling on an artificial intelligence (AI)-focused model in 2019. It now offers more than 130 ready-made AI applications to help businesses speed up their adoption of this revolutionary technology.
Given the outsized investor interest in all things AI in recent years, it's a bit surprising that C3.ai stock has plummeted 50% so far in 2025. That decline was partly fueled by the unexpected retirement of CEO Thomas Siebel, who stepped away in September due to health issues. The company founder frequently played an active role in getting major deals over the line, so his departure resulted in a sharp decline in C3.ai's revenue during its most recent quarter.
New CEO Stephen Ehikian is reported to have the skills and experience to help the company return to growth. That's got investors asking whether this year's dip in C3.ai stock is a buying opportunity? According to the consensus price target of the analysts tracked covering the stock, there might be reason for caution.
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C3.ai is making AI accessible for all businesses
Developing and training AI models requires billions of dollars in specialized data center chips and components, and few businesses have the financial resources to build that infrastructure themselves. As a result, many companies are turning to C3.ai's ready-made and customizable solutions to meet their needs.
For example, for banks and financial institutions, the C3.ai Anti-Money Laundering application can improve the detection of suspicious activity by as much as 200%, according to the company, while lowering the rate of false positives by 85%, which reduces the workload for human investigators. Pharmaceutical companies and healthcare providers can use the C3.ai AI Health suite of applications to streamline regulatory submissions and forecast drug demand.
C3.ai sells its applications directly to its customers, but they are also accessible through many of the major cloud platforms businesses already use, including Amazon Web Services and Microsoft Azure. This makes integration seamless because those platforms also provide all the computing power enterprises need to scale up their use of C3.ai's software.
C3.ai's revenue plunged in the recent quarter
C3.ai delivered $70.3 million in revenue during its fiscal 2026 first quarter (which ended July 31). That was down 19% from the year-ago period. It was also significantly below the company's forecast range of $100 million to $109 million, and that resulted in a significant problem at the bottom line because management couldn't slash costs fast enough to avoid a blowout loss.
On a generally accepted accounting principles (GAAP) basis, C3.ai generated a net loss of $116.7 million during the quarter, which was up by a whopping 85% year over year.
Siebel called the first-quarter results "unacceptable," though he attributed them in part to a restructuring of C3.ai's sales department that disrupted deal flow. However, he also said he had been less involved in the deal-making process than he normally was because of his health issues. Situations like this are always a risk in founder-led companies, because prominent figures like Siebel often become a part of the brand itself.
New CEO Ehikian is highly experienced. He founded two AI start-ups himself (which were both acquired by Salesforce), and he has also served on the board of many public and private organizations. So we can presume he has the skills to turn C3.ai around. However, management is still forecasting a 24% decline in revenue for fiscal 2026 Q2 (which ends on Oct. 31). It's going to take time for this company to return to growth.
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Key Data Points
Wall Street appears bearish on C3.ai stock
The Wall Street Journal tracks 16 analysts who cover C3.ai stock, and just two of them have given it a buy rating. Seven call it a hold, while three others are in the underweight (bearish) camp, and four recommend outright selling.
Those analysts have an average price target of just $14.67 for the stock, which implies a potential downside of 19% over the next 12 to 18 months from its current price. That isn't great news for shareholders.
Unfortunately, C3.ai is operating a shrinking business right now, and shrinking businesses tend to destroy value over the long term. Until the company proves it can consistently grow its revenue again, its stock is unlikely to mount a meaningful recovery.
The big question is what C3.ai's identity will become now that its founder is no longer leading the way. Even trillion-dollar giants like Tesla and Meta Platforms might lose some of their shine if their visionary leaders, Elon Musk and Mark Zuckerberg, walked away.
