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Investing.com - UBS lowered its price target on C3.ai (NYSE:AI) to $23.00 from $27.00 on Monday, while maintaining a Neutral rating following the company’s significant revenue shortfall. The stock, currently trading at $16.88, down from $22.66 in the previous session, has shown significant volatility according to InvestingPro data.
C3.ai preannounced first-quarter fiscal 2026 results showing revenue of $70.3 million, representing a 19% year-over-year decline, far below the company’s guidance of $104.5 million, which had projected 20% growth. The $2.27 billion market cap company maintains strong liquidity with a current ratio of 6.86, though InvestingPro analysis indicates the stock is currently undervalued.
The artificial intelligence software provider attributed the disappointing performance to a sales reorganization and health issues affecting the CEO’s ability to "actively participate in the sales process," according to UBS analyst commentary.
UBS noted that nearly 50% ($51 million) of C3.ai’s revenue in the previous quarter came from one-time License and Professional Engineering Services (PES) revenue, suggesting volatility in the company’s revenue streams.
The investment bank cited limited visibility into key revenue drivers as the primary reason for maintaining its neutral stance on the stock, with full financial details expected in early September when C3.ai releases its complete quarterly results.
In other recent news, C3.ai reported preliminary first-quarter revenue ranging between $70.2 million and $70.4 million, which missed the midpoint of its guidance by 33% and represented a 19% decline year-over-year. This revenue shortfall has led to various analyst actions. Wedbush lowered its price target for C3.ai to $23 from $35, citing a challenging quarter, though it maintained an Outperform rating. Meanwhile, DA Davidson downgraded the stock from Neutral to Underperform and cut its price target significantly to $13 from $25, following what it described as results that fell significantly below guidance.
Wolfe Research reiterated its Underperform rating and maintained a $15 price target, highlighting concerns about the company’s future expectations after it did not reiterate guidance in its 8-K filing. Additionally, C3.ai announced that CEO Thomas M. Siebel will step down due to health issues, prompting the company to start a search for his successor. The search will be led by an international search firm and overseen by a committee from C3.ai’s board and management team. Needham maintained its Hold rating on the stock despite the revenue miss. These developments highlight a period of significant change and challenge for C3.ai.
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