The share price of C3.ai (AI) have dipped sharply after the software maker firm revised its target of becoming profitable on an adjusted basis by the fourth quarter of current fiscal year in light of rising AI investments. At the time of writing, the company AI stock fell 12.24% to $27.61.C3.ai reported a fiscal 2024 …
The share price of C3.ai (AI) have dipped sharply after the software maker firm revised its target of becoming profitable on an adjusted basis by the fourth quarter of current fiscal year in light of rising AI investments. At the time of writing, the company AI stock fell 12.24% to $27.61.
C3.ai reported a fiscal 2024 first quarter loss of $0.09, lower than in 2022 and better than market expectation. The firm’s revenue increased 10.8% to $72.36 million, also above expectation. Wall Street Analyst polled by FactSet has expected a loss of 17 cents a share on revenue of $71.6 million. However, the gross margin came in at 69% which fell short of analyst estimates of 73.1%.The firm currently expects an operating deficit of $100 million in fiscal 2024. Additionally, there is an increase from a projected operating loss of $70 million.
The company stated that it has decided to invest in lead generation, branding, market awareness and customer success for its generative AI products after a “careful consideration”. As a result, C3.ai stated that contrary to what it had previously stated, it is not planning on becoming non-GAAP profitable at the conclusion of the fiscal year. Despite the company’s long-held belief that the AI business would be sizable, Thomas Siebel, its founder and CEO, stated that “no one could have anticipated the size and growth rate” we’re now witnessing. He added that C3.ai has spent the last 14 years putting together for this opportunity and will seize it.
The software maker focuses on the energy, financial services, and defense sectors while assists businesses in developing AI applications. The enterprise AI software vendor switched from a subscription-based pricing structure to a consumption-based one in December. Wedbush’s analyst, Daniel Ives maintained an outperform rating on AI stock, but reduce his price target from 50 to 42 citing “a push out of profitability”.
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