Bullish indicating open at $55-$60, IPO prices at $37
Investing.com - DA Davidson downgraded C3.ai (NYSE:AI) from Neutral to Underperform and significantly reduced its price target to $13.00 from $25.00 following the company’s preliminary results announcement. The stock, currently trading at $22.13, has already declined over 30% in the past six months, according to InvestingPro data.
The downgrade comes after C3.ai reported preliminary results on Friday that fell "significantly below guidance," according to the research firm’s assessment of the artificial intelligence software provider’s performance.
C3.ai simultaneously announced a restructuring of its sales and services organization, including the appointment of new leadership across different regions, signaling organizational changes amid the disappointing results.
DA Davidson expressed concerns about the "durability of growth" at C3.ai, citing the company’s "increasing reliance on non-recurring revenue" as a particular area of concern that may have contributed to the weak preliminary results.
The research firm offered a cautious outlook, stating that "it is likely the business gets worse before it gets better from here," which factored into its decision to lower the price target by nearly 50 percent.
In other recent news, C3.ai has initiated a search for a new Chief Executive Officer following the announcement that current CEO Thomas M. Siebel will step down due to health issues. Siebel was diagnosed with an autoimmune disease in early 2025, leading to significant visual impairment. The search for a successor will be conducted by an international search firm, overseen by a committee from C3.ai’s board and management team. In another development, C3.ai has formed a strategic partnership with Huntington Ingalls (NYSE:HII) Industries to integrate AI solutions across shipbuilding operations, aiming to enhance production and support U.S. Navy needs. Additionally, C3.ai has entered into a strategic cooperation agreement with Univation Technologies to commercialize AI-powered predictive maintenance solutions for the petrochemical industry. Under this agreement, Univation will license and distribute C3 AI software. C3.ai also announced the appointment of Rob Schilling as Executive Vice President and Chief Commercial Officer, who will lead the company’s customer-facing operations. Schilling joins from Oracle (NYSE:ORCL), where he held a senior leadership position in cloud enterprise sales applications.
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