TLDR
- C3.ai stock plummeted 29% in premarket trading after reporting preliminary Q1 revenue of $70.3 million, 33% below guidance
- CEO Tom Siebel is stepping down due to health issues including an autoimmune disease causing vision loss
- The company underwent a major sales team reorganization during the quarter which hurt performance
- Operating losses doubled from forecasts to between $57.7-$59.9 million versus earlier guidance of $23.5-$33.5 million
- D.A. Davidson downgraded the stock to Underperform with a $13 price target, calling results “catastrophic”
C3.ai stock was trading down 29% to $15.66 in premarket Monday morning after the artificial intelligence company reported disastrous preliminary quarterly results. The AI stock decline comes after C3.ai missed revenue expectations by a massive margin.
The AI company reported preliminary Q1 revenue of approximately $70.3 million after Friday’s market close. This revenue figure landed 33% below the midpoint of C3.ai’s previous guidance range of $100-109 million.
C3.ai stock performance deteriorated further as revenue dropped 19% year-over-year. For an AI stock in the rapidly growing artificial intelligence sector, declining revenue raises serious concerns about market positioning.
The AI company’s operating loss situation looked even worse than the revenue miss. C3.ai expects adjusted operating losses between $57.7-59.9 million for the quarter.
These operating losses represent roughly double the company’s earlier forecast of $23.5-33.5 million in losses. C3.ai stock investors weren’t prepared for such a massive earnings miss on both revenue and profitability metrics.
C3.ai CEO Health Issues Impact AI Stock Performance
C3.ai CEO Tom Siebel described the Q1 sales results as “completely unacceptable” during the preliminary earnings announcement. The AI company CEO attributed weak performance to a comprehensive reorganization of global sales and service teams.
Siebel confirmed this sales reorganization process is now complete. However, the C3.ai CEO revealed that personal health challenges limited his leadership involvement during the critical quarter.
The AI company CEO disclosed earlier in 2025 that he received an autoimmune disease diagnosis. This medical condition has resulted in severe vision impairment affecting his executive capabilities.
C3.ai announced in July that CEO Siebel would step down from his leadership role due to these ongoing health issues. The AI company has initiated a search process for Siebel’s replacement.
Siebel will transition to executive chairman once C3.ai identifies a new CEO. The outgoing CEO expressed confidence that AI company sales performance would improve in Q2.
Wall Street Analysts Downgrade AI Stock Rating
The preliminary earnings results triggered immediate analyst downgrades for C3.ai stock. D.A. Davidson analyst Gil Luria characterized the AI company performance as “catastrophic” in his research note.
Luria downgraded C3.ai stock rating from Neutral to Underperform following the earnings miss. The analyst also reduced his AI stock price target to $13 from the previous $25 target.
The Wall Street analyst highlighted the ongoing CEO search as an additional disruption factor for C3.ai stock. Luria expects the AI company’s business trends to worsen before showing improvement.
The analyst also dismissed potential acquisition speculation for C3.ai stock. Luria stated that merger activity appears unlikely until the AI company demonstrates consistent financial performance across multiple quarters.
Current Wall Street consensus maintains a Hold rating for C3.ai stock. Analyst recommendations include five Buy ratings, seven Hold ratings, and three Sell ratings for the AI stock.
The average analyst price target for C3.ai stock stands at $31, implying approximately 40% upside potential from current trading levels. However, these price targets may face downward revisions following the earnings miss.
C3.ai stock has declined 36% year-to-date through Friday’s closing price. Monday’s premarket decline would extend AI stock losses beyond 50% for 2025.
C3.ai is scheduled to release complete Q1 FY26 financial results on September 3, 2025.
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