C3.ai Inc’s (AI) stock took a tumble following the company’s first-quarter financial results, but analysts remain optimistic about the long-term outlook. This optimism stems from the ongoing surge in demand for AI solutions.
Wedbush analyst Dan Ives, while lowering his price target from $40 to $30, maintained an Outperform rating on C3.ai. He attributed the stock’s drop to a change in reporting software and services revenue, which will impact subscription and services growth moving forward. However, Ives remains bullish, pointing to a strong pipeline across industries and anticipating solid revenue growth alongside bottom-line expansion as the AI revolution gains momentum.
Echoing Wedbush’s sentiments, Oppenheimer analyst Timothy Horan also maintained an Outperform rating, recognizing the volatility in quarterly results but emphasizing the strong demand C3.ai is witnessing. He forecasts 30% revenue growth this year, escalating to nearly 40% by the end of next year, citing C3.ai’s unique AI applications and minimal competition.
KeyBanc analyst Eric Heath, while recognizing the AI opportunity, expressed concerns about C3.ai’s ability to diversify beyond vertical-specific applications. He pointed to weak subscription revenues but acknowledged that services revenue exceeded expectations. Heath maintained his full-year 2025 estimates but revised his revenue expectations for 2026 downward.
Piper Sandler analyst Arvind Ramnani maintained a Neutral rating, noting the positive trend in interest for C3.ai’s products, evidenced by 71 agreements secured in the quarter. However, he anticipates margin pressure due to C3.ai’s focus on expanding pilot programs.
DA Davidson analyst Gil Luria echoed the consensus regarding continued demand for C3.ai’s solutions, attributing the sell-off to weaker-than-expected subscription revenues. Luria acknowledged the company’s significant growth opportunity, suggesting that the stock reflects current growth prospects.
Despite the dip, C3.ai shares experienced a slight rebound on Thursday, closing down 12.3% at $20.18. The company’s focus on cash management and its strong pipeline offer reasons for continued optimism within the AI sector. While concerns linger regarding subscription revenue and margin pressures, C3.ai’s position in the rapidly evolving AI landscape suggests a promising future.
