Shares of C3.ai, Inc. (AI) tumbled 5.10% in intraday trading on Friday, as investors reacted to a comparative analysis highlighting stronger growth prospects for rival AI company SoundHound AI. The sell-off comes amid a broader reassessment of artificial intelligence stocks in the market.
A recent report comparing C3.ai and SoundHound AI revealed that while C3.ai boasts a diverse low-code AI development platform geared towards large-scale enterprise and public sector customers, SoundHound AI is showing more robust growth. For 2025, SoundHound AI is targeting full-year revenue growth between 97% at the midpoint, significantly outpacing C3.ai's projected growth of 24% to 27%.
Despite C3.ai's strategic alliance with Microsoft and its impressive list of major corporate and government clients, investors appear concerned about the company's valuation relative to its growth rate. The report noted that C3.ai trades at a forward price-to-sales ratio of 8, compared to SoundHound AI's 25, suggesting that the market may be reevaluating C3.ai's growth premium. As AI competition intensifies, C3.ai's stock decline reflects growing investor scrutiny on the company's ability to maintain its market position and accelerate growth in the rapidly evolving AI sector.