C3.ai shares have increased by 12% over the past six months, outperforming the Zacks Computer & Technology sector, which saw a return of 6.6%.
This impressive growth results from strong demand for its enterprise AI applications, especially C3 Generative AI.
In fiscal Q2 2025, C3.ai secured 58 agreements, 36 being pilot projects. This shows rising interest in its Enterprise AI and Generative AI solutions.
C3.ai Continues to Outperform
Image Source: Zacks Investment Research
Partnerships Fueling Growth
C3.ai has emerged as a key player in AI, driven by strong interest in its C3 Generative AI solutions and a growing partner network that includes major cloud providers such as Amazon AMZN, Alphabet GOOGL, and Microsoft MSFT.
Collaborations with giants like Google Cloud and Amazon Web Services (AWS) accounted for 62% of the company’s agreements in Q2 of fiscal 2025, highlighting the importance of its partner ecosystem in boosting revenue.
During the second quarter, in collaboration with Alphabet’s Google Cloud, C3.ai established 20 agreements, reflecting a 180% year-over-year increase. Additionally, the company played a role at Google’s Public Sector Summit in Washington, DC, and hosted six roundtable discussions across North America and LATAM.
Moreover, C3.ai’s partnership with Microsoft helps leverage the Azure platform, further enhancing its AI capabilities and customer reach.
Growing Public Sector Partnerships
C3.ai is gaining traction in the public sector, particularly with U.S. government agencies.
In December 2024, the company, alongside ECS, received a task order from the U.S. Army to modernize its information management. This task emphasizes deploying the AI-driven C3 AI Decision Advantage application to enhance intelligence operations and alleviate soldier workloads.
The federal sector witnessed strong growth in Q2 of fiscal 2025, highlighted by new agreements with the U.S. Department of Defense, U.S. Air Force, U.S. Navy, U.S. Army, U.S. Marine Corps, Defense Logistics Agency, Chief Digital Artificial Intelligence Office, and National Science Foundation.
Positive Revenue Forecasts
C3.ai has seen significant adoption of its C3 Generative AI solutions, leading to notable demand for its Enterprise AI software.
For the third quarter of fiscal 2025, C3.ai anticipates revenues in the range of $95.5 million to $100.5 million.
For the entire fiscal year 2025, the revenue expectation is between $378 million and $398 million.
Earnings Estimates Show Variability
The Zacks Consensus Estimate for third-quarter fiscal 2025 revenue stands at $97.97 million, suggesting a growth of 24.96% compared to the previous year’s quarter.
The consensus estimate indicates a loss of 25 cents per share, remaining unchanged over the last month. This figure shows a year-over-year decline of 92.31%.
For fiscal 2025, the revenue consensus is $388.16 million, reflecting a year-over-year increase of 29.57%.
The consensus mark for loss is pegged at 63 cents per share, a slight increase of one penny over the last month, implying a year-over-year decrease of 34.04%.
C3.ai, Inc. Price and Consensus
C3.ai, Inc. price-consensus-chart | C3.ai, Inc. Quote
Investor Insights on C3.ai
While C3.ai benefits from strong demand and partnerships, the company faces intense competition in the enterprise AI sector that could hinder its market positioning.
To combat this, C3.ai plans to invest heavily in its offerings; however, this strategy may pressure profit margins in the short term, presenting potential risks for investors.
Moreover, macroeconomic uncertainties further complicate C3.ai’s growth and market integration.
Currently, C3.ai’s stock appears relatively overvalued, with a Value Score of F suggesting caution for potential investors.
The forward 12-month Price/Sales ratio is 9.09X, notably higher than the sector’s average of 7X.
Current Price/Sales Ratio
Image Source: Zacks Investment Research
Holding a Zacks Rank #4 (Sell), C3.ai is not recommended for investment at this time.
You can view the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
7 Investment Picks for the Coming Month
Recently released: Top analysts have identified 7 premium stocks from a list of 220 Zacks Rank #1 Strong Buys, which they believe are “Most Likely for Early Price Pops.”
This exclusive list has outperformed the market more than twice since 1988, boasting an average annual return of +24.1%. Don’t miss the opportunity to explore these selected stocks.
To get the latest recommendations from Zacks Investment Research, download ‘7 Best Stocks for the Next 30 Days’ for free.
Amazon.com, Inc. (AMZN): Free Stock Analysis Report
Microsoft Corporation (MSFT): Free Stock Analysis Report
C3.ai, Inc. (AI): Free Stock Analysis Report
Alphabet Inc. (GOOGL): Free Stock Analysis Report
To read this article on Zacks.com, click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
