C3.ai (AI) saw its stock price plummet 5.72% in intraday trading on Tuesday, as investors continue to express concerns over the company's financial challenges and uncertain future. This drop comes amidst a broader sell-off in AI stocks, with C3.ai's shares now down 58% from their December peak.
The artificial intelligence software provider has been facing scrutiny due to its inability to turn rapid revenue growth into profitability. Despite reporting a 26% year-over-year increase in revenue to $99 million for the third quarter of fiscal 2025, C3.ai's costs and expenses far exceeded its revenue, resulting in a net loss of $209 million. This financial imbalance has raised doubts about the company's long-term viability and growth prospects.
Adding to investor worries is the uncertainty surrounding C3.ai's partnership with oil giant Baker Hughes, which is up for renewal soon. The company has not provided any indications that this critical agreement will continue, potentially putting a significant portion of its revenue at risk. With its largest client's future unclear and ongoing struggles to achieve profitability, C3.ai faces an uphill battle in convincing investors of its long-term potential in the competitive AI market.
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