C3.ai, Inc. (AI), a leading provider of enterprise AI software, witnessed a significant 11.92% plunge in its stock price on Tuesday, December 10th, during the pre-market trading session. This decline came despite the company's strong fiscal second-quarter results and an upward revision in its revenue forecast for the full year 2025.

On Monday, C3.ai reported better-than-expected second-quarter revenue of $94.3 million, marking a 29% year-over-year increase. The company also raised its fiscal 2025 revenue guidance to a range of $378 million to $398 million, citing healthy demand for its AI solutions as enterprises seek to streamline their workflows.

However, the positive financial performance and outlook appear to have been overshadowed by growing competition in the AI industry and broader market concerns. Several key factors may have contributed to C3.ai's stock plunge:

1. Intensifying competition from tech giants like Microsoft, Amazon, and Google, which have established a strong presence in the cloud and AI sectors, could pose a significant challenge for C3.ai's market share and growth prospects.
2. 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 cautious sentiment surrounding AI stocks.
3. Broader market uncertainty and concerns about valuations in the AI sector, which has experienced a significant rally in recent times, could also have weighed on C3.ai's stock.