AI Software Maker C3.Ai Tumbles on Soft Outlook

Shares in C3.ai (AI:US) fell as much as 23% on Thursday after the artificial intelligence (AI) software maker offered weaker-than-expected guidance for its fiscal 2024 year.

C3.ai posted an FQ4 adjusted loss of $0.13 on revenue of $72.4 million, better than the analyst consensus that was looking for a loss of $0.17 on revenue of $71.29 million. Subscription revenue increased to $56.9 million, constituting 79% of the total revenue.

“We believe it is generally agreed today that the market for enterprise AI applications is substantially larger and growing at a much greater growth rate than experts predicted. C3 AI has been at the vanguard of the enterprise AI market for over a decade as that market has developed from its roots in IoT, to unsupervised learning, supervised learning, NLP, deep learning, reinforcement learning, and now generative AI,” the company said in a press release.

It added that “the interest in applying AI to business processes is more active than we've ever seen.”

Despite these bullish comments, the company’s forward-looking guidance failed to entice investors.

For this quarter, C3.ai sees revenue in the range of $70 million to $72.5 million, in line with the consensus of $72.1M. The company also expects to report an adjusted operating loss of $25 million - $30 million.

On a full-year basis, the company expects sales of $295 million - $320 million with the midpoint of this range coming in below the market consensus of $317 million. Full-year losses are seen between $50 million and $75 million. 

Congress members didn’t trade AI shares lately. However, this could change in the near term as shares in C3.ai are up more than 200% year-to-date amid the surge in generative artificial intelligence interest that has created a frenzy on Wall Street.