C3.ai Inc (NYSE:AI) stock is at the bottom of the Nasdaq today, last seen down 26% to trade at $16.40. The artificial intelligence (AI) software company pre-announced that first-quarter earnings and revenue would be dramatically below estimates. In response, D.A. Davidson downgraded the stock to "underperform" from "neutral," along with a price-target cut to $13 from $25. UBS and Wedbush trimmed their price targets to $23 as well.
This is poised to be AI's worst single-session drop ever. The shares earlier fell to a two-year low of $14.70, and are now 53% lower in 2025. The selloff has pushed the equity's 14-Day Relative Strength Index all the way down to 16, deep in "oversold" territory.
Options traders are all in on calls. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), traders have bought to open 60,362 calls in the past two weeks, compared to 5,494 puts. The resultant 10-day call/put volume ratio of 10.99 ranks in 100th percentile of its annual range, indicating the rate of call buying has never been higher in the last year. With 20% of AI's total available float sold short, its possible some of these calls could be shorts seeking an options hedge.
Today, 214,000 calls have already crossed the tape, volume that's 11 times the average intraday amount. The August 23.50 call is the most popular, with new positions being bought to open.
