Can C3.ai Remain Competitive?
C3.ai (NYSE: AI), a software provider that uses artificial intelligence to solve business problems, recently reported its earnings for the fourth quarter of fiscal year 2023. Despite the company surpassing analyst expectations by $1 million, C3.ai’s stock saw a significant drop of 22% in after-hours trading.
The company’s sluggish sales growth has raised red flags for investors who are concerned about the company’s ability to meet future revenue targets. C3.ai’s growth in revenue and RPO (remaining performance obligations) has also slowed considerably over the past year.
The company’s adjusted gross margin declined by 7 percentage points year over year to 74% in Q4 of fiscal 2023. This decline in gross margin could be due to increased competition in the AI software market or higher costs associated with developing and maintaining their software.
C3.ai has a history of underperforming its own forecasts, which may undermine investor confidence in the company’s ability to meet future targets. Additionally, the company’s tendency to chase the latest tech trends adds to its volatility.
Overall, investors may want to avoid C3.ai due to its unstable performance. While the company surpassed analyst expectations, its slow sales growth and declining gross margin are cause for concern. As the AI software market becomes increasingly crowded, C3.ai will need to demonstrate sustained growth and profitability to remain competitive.
C3.ai, Inc. is the Enterprise AI application software company. C3 AI delivers a family of fully integrated products including the C3 AI Platform, an end-to-end platform for developing, deploying, and operating enterprise AI applications, C3 AI applications, a portfolio of industry-specific SaaS enterprise AI applications that enable the digital transformation of organizations globally, and C3 Generative AI, a suite of large AI transformer models for the enterprise.