Its ticker symbol is AI, but that doesn't mean the hype around artificial intelligence has given the stock of C3.ai (AI 1.25%) a boost this year.
In fact, it's been one of the worst-performing AI stocks of 2025, losing half of its value thus far. The tech company has disappointed investors with unimpressive results in recent quarters, and the unexpected departure of its CEO didn't help matters, either.
It's easy to see why the stock is a bad buy. But with the company's more than 130 turnkey AI applications for various industries and the potential for further AI-related growth still out there, could there be a compelling reason to take a contrarian position in the stock right now?
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Could a change in CEOs be positive for the business?
Thomas Siebel is the founder of C3.ai, but earlier this year, he announced he would be stepping down as CEO due to health reasons. Stephen Ehikian took over as of Sept. 1, and Seibel says the new CEO gives C3.ai, "the rare combination of the right person, at the right company, in the right market, at the right time."
While it's unfortunate for Siebel to relinquish his leadership position of the company he founded, it may be the best move for shareholders in the long run. Under Siebel, the business had grown but showed little progress -- if any -- on the bottom line, with seemingly no path to profitability anytime soon.
NYSE: AI
Key Data Points
With Ehikian, shareholders are getting a CEO who helped build RelateIQ and Airkit.ai, which Salesforce ended up acquiring. While this doesn't mean that C3.ai will end up being bought out, it's a good sign nonetheless that Ehikian was able to help build up companies that were attractive enough for a much larger business to want to acquire them.
The good news is that even if there's only a modest improvement in the company's financial performance, that could be enough to give C3.ai's stock a boost in the near future.
Low expectations could make it easy for the company to deliver a positive surprise
C3.ai stock has done so poorly this year and its results were so abysmal last quarter that low expectations are effectively baked into its valuation. That means that it may not take much for the company's new CEO to surprise Wall Street and generate some excitement around the AI stock again.
When the company reported earnings on Sept. 3, it showed that revenue had nose-dived nearly 20%, to $70.3 million. And its operating loss soared from $72.6 million in the prior-year period to $124.8 million, for the period ended July 31. For a company already generating unimpressive results, that led to another dip in value.
But despite the doom and gloom of last quarter, the stock has already recovered and is back to trading near where it was prior to the release of earnings (on Sept. 2, the stock closed at $16.82). This could be a sign that investors already think the stock may have bottomed out.
Should you take a chance on C3.ai stock?
I can see a situation in which the company does well in its upcoming earnings report and surprises investors (in a positive way this time). But I wouldn't gamble on that, which is effectively what taking a contrarian position in the stock would be at this point: nothing more than a gamble. This is not a quality business that has strong fundamentals that is facing potentially just a temporary setback.
In C3.ai's case, it still hasn't proved it is a profitable and sustainable business to invest in. Until that changes, the safest option is to remain on the sidelines. Although the stock may look cheap, it's still going to be too risky for the vast majority of investors.
