Shares of C3.ai, Inc. (AI) plummeted 5.78% on Thursday as analysts lowered their price targets and expressed concerns over the company's profitability and growth outlook, despite its better-than-expected third-quarter results.

C3.ai, a provider of enterprise artificial intelligence (AI) software, reported a narrower-than-expected loss and beat revenue estimates in its fiscal third quarter. However, analysts remained cautious about the company's prospects, citing challenges in achieving sustainable profitability and maintaining strong growth momentum.

Several analysts, including JP Morgan and KeyBanc Capital Markets, lowered their price targets for C3.ai, citing concerns over the company's subpar core growth and significant discounts to its peers in terms of profitability and scale. Analysts also highlighted the company's reliance on demonstration licenses, which lack recurring revenue and add uncertainty to its growth picture.