C3.AI Stock Declines Following Q2 Earnings Report

C3.Ai Inc (NYSE: AI) shares experienced a decline on Tuesday, following the release of the company’s second-quarter financial results. This movement in stock price coincided with analysts making adjustments to their price targets based on the newly announced figures. Here’s a summary of the key information.

Financial Performance: C3.AI released its second-quarter earnings, reporting a revenue of $93.34 million. This figure exceeded the analyst expectations of $91.02 million, according to data from Benzinga Pro. The company also reported a loss of 6 cents per share, which was better than the anticipated loss of 16 cents per share.

Initially, after the earnings release, shares of C3.AI surged, likely spurred by a new long-term alliance with Microsoft Corp (MSFT). This agreement, which spans an initial duration of five and a half years, aims to enhance growth in the enterprise AI sector.

Thomas Siebel, the chairman and CEO of C3.AI, emphasized the significance of the partnership, stating, "It is difficult to overstate the potential of the Microsoft–C3 AI strategic alliance. By establishing C3 AI as a preferred AI application provider on Azure and creating a Microsoft-scale go-to-market engine, we’re making it easy for businesses to adopt and deploy C3 AI applications. This is an inflection point for Enterprise AI, driving growth."

C3.AI provided guidance for the third quarter, expecting revenues to fall between $95.5 million and $100.5 million, slightly below the analyst estimate of $97.57 million. Furthermore, the company forecasted total revenue for the full year to be in the range of $378 million to $398 million, again slightly lower than the analyst estimate of $382.57 million.

Market Reactions: Despite the positive initial reception, C3.AI shares reversed course in early trading on Tuesday, declining by nearly 10%. This downturn came even as several analysts raised their price targets for the stock. The received ratings from analysts included a mix of neutral and underweight positions, indicating a cautious perspective despite the raised expectations. Below are some highlights from analysts' reactions:

• Piper Sandler analyst Arvind Ramnani maintained a Neutral rating and adjusted the price target from $24 to $42.

• Needham analyst Mike Cikos reiterated a Hold rating on C3.AI.

• Morgan Stanley analyst Sanjit Singh kept an Underweight rating but increased the price target from $21 to $32.

• Northland Capital Markets analyst Michael Latimore maintained an Outperform rating and raised the price target from $35 to $45.

Current Stock Performance: As of the latest updates, C3.AI shares were recorded down by 9.78% at a price of $37.61.

Investors should continue to monitor developments from C3.AI, especially in light of its strategic partnership with Microsoft and future revenue expectations.

C3.AI, earnings, Microsoft