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C3.ai (AI) is down roughly 30% at writing after reporting disappointing preliminary results for Q1, reflecting its struggles in carving out a niche in the AI market filled with formidable rivals.
However, the enterprise artificial intelligence solutions firm has completed its sales and services restructuring and is “positioned to accelerate going forward,” according to its earnings release on Monday.
C3.ai stock has been a massive letdown for its investors since the start of 2025. Including today’s plunge, it’s down nearly 60% versus its year-to-date high.
C3.ai Stock Is Grappling With Structural Concerns
Investors should remain wary of buying AI shares on the post-earnings decline as its preliminary release signals deeper structural concerns.
C3.ai missed revenue guidance by an alarming 33% and recorded steeper-than-expected operating losses for its first financial quarter, indicating weak competitive positioning in a booming AI sector.
Additionally, the NYSE-listed firm is currently on the lookout for a new chief executive officer, which signals execution-related risks ahead as well.
All in all, with leadership in flux and momentum lagging rivals, the C3.ai share price crash today reflects more than a temporary stumble – it signals unresolved strategic instability instead.
How to Play AI Shares After Preliminary Q1 Release
C3.ai shares are tumbling also because a senior D.A. Davidson analyst, Gil Luria, downgraded the AI stock to “Underperform,” saying the firm’s preliminary numbers were truly “catastrophic.”
More importantly, Luria believes things will likely worsen for the artificial intelligence company before they begin to improve.
According to him, the prospect of a potential merger is off the table as well until C3.ai reports stable financials for several quarters.
The analyst slashed his price target on the California-based business to $13 on Monday, indicating potential downside of another 20% from here.
Wall Street’s View on C3.ai
While the consensus rating on AI stock currently sits at “Hold” only, the mean target of about $30 signals nearly 100% potential upside from current levels.
However, investors should practice caution since the company’s Q1 preliminary report could make analysts downwardly revise their estimates for C3.ai shares over the next few days.
