Shares of C3.ai, Inc. (AI), a leading provider of enterprise AI software, plunged 5.23% in pre-market trading on Tuesday, despite the company raising its revenue forecast for fiscal year 2025 due to strong demand for its artificial intelligence solutions.

On Monday, C3.ai reported better-than-expected second-quarter revenue of $94.3 million, up 29% year-over-year, and raised its fiscal 2025 revenue guidance to a range of $378 million to $398 million, up from its previous forecast of $370 million to $395 million. The company attributed the upward revision to healthy demand for its AI software as enterprises seek tools to streamline their workflows.

However, the positive outlook appears to have been overshadowed by broader concerns in the AI industry. Among the potential factors weighing on C3.ai's stock are intensifying competition from tech giants like Microsoft and Amazon, which have established a strong presence in the cloud and AI sectors. Additionally, news of China's antitrust regulator investigating Nvidia, a leading AI chip maker, due to suspected violations of the terms of a previous deal, may have contributed to the cautious sentiment surrounding AI stocks.