C3.ai Stock Below 50- & 200-Day SMAs: Turnaround or More Pain?

C3.ai, Inc. AI has seen a sharp downturn this year, falling beneath key industry benchmarks and triggering technical warning signs. C3.ai stock trades below its 50 and 200-day simple moving averages (SMAs), indicating challenges in sustaining the recent performance levels.

C3.ai Price Movement vs. 50-Day & 200-Day Moving Averages

C3.ai Underperforms Industry, Sector

C3.ai shares have plunged 40.8% year to date amid growing recession concerns, underperforming the Zacks Computer & Technology sector’s decline of 14.9% and the Zacks Computers - IT Services industry’s decrease of 17%. As economic uncertainty looms, businesses may scale back on investments, including those in artificial intelligence (AI). That poses a risk for C3.ai, whose growth heavily depends on enterprise adoption of its AI solutions. Also, C3.ai faces headwinds, including continued operating losses and margin pressure from a pilot-heavy revenue mix. The costs associated with onboarding new partners, building enablement infrastructure, and supporting a larger global pipeline have temporarily been suppressing profitability.

At its current price, the AI stock represents a 54.8% discount from its 52-week high of $45.08. It also indicates a 19.7% premium to its 52-week low of $17.03.
 

Amid persistent market volatility fueled by trade policy uncertainties, inflation concerns, and changing consumer sentiment, the question remains: can C3.ai continue to grow in the face of these headwinds?

C3.ai’s Estimate Revision Trend

The Zacks Consensus Estimate for C3.ai’s fiscal 2025 and 2026 loss per share has narrowed to 45 cents (from 62 cents) and 46 cents (from 55 cents), respectively, in the last 60 days. This reflects a positive shift in the analysts’ sentiment.

For fiscal 2025 and 2026, the Zacks Consensus Estimate for C3.ai’s sales implies a 29.7% and 22.4% growth, respectively. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
 

Let’s explore the key factors that could spark a rebound for C3.ai.

Partnerships With Tech Giants Becoming a Major Revenue Engine

Strategic alliances remain the cornerstone of C3.ai’s go-to-market approach, and the fiscal third quarter validated the momentum in those partnerships. The company’s relationship with Microsoft Corporation MSFT produced impressive results. Since announcing their expanded alliance in late 2024, C3.ai closed 28 new deals through joint engagements, spanning nine industries. Sales cycles with Microsoft have shortened by approximately 20%, a testament to the strength of their joint go-to-market motions. As of the fiscal third-quarter end, C3.ai and Microsoft were engaged in more than 600 active enterprise opportunities globally.

Further extending its reach, C3.ai deepened its partnership with Amazon’s AMZN Amazon Web Services (AWS). Their collaboration is focused on delivering advanced enterprise AI solutions with an emphasis on execution speed and global scalability. Additionally, the newly forged relationship with McKinsey’s QuantumBlack division is intended to blend strategic consulting with C3.ai’s technology, equipping enterprise clients with both vision and AI-powered execution tools.

These collaborations underscore C3.ai’s transformation into a globally distributed AI company with the ability to scale sales and support through partner channels. According to the company, 71% of fiscal third-quarter agreements were facilitated through partner engagements.

C3.ai’s expanding footprint was reflected in its growing customer base. The company secured new or expanded agreements with major organizations, including GSK, Sanofi, ExxonMobil, Shell, Holcim, Quest Diagnostics, and the New York Power Authority. In the federal sector, C3.ai signed contracts with the U.S. Navy, Air Force, and the Missile Defense Agency, among others. The company also made inroads with multiple state and local governments, finalizing 21 deals in the quarter.

C3.ai Strengthens Lead in Generative and Agentic AI

C3.ai’s early focus on Generative and Agentic AI is driving real-world results. In the fiscal third quarter, the company launched 20 new Generative AI pilots with clients like Mars and U.S. government agencies. Its advancements in Agentic AI—especially in data fusion and reasoning—were boosted by a new time-series embedding model that speeds up deployment for complex use cases. With more than 130 ready-to-scale applications, C3.ai is shifting from a model developer to an outcome-driven AI platform, capitalizing on industry-wide declines in inference costs.

Solid Top-Line Growth for C3.ai

C3.ai reported a robust third-quarter fiscal 2025, marked by accelerated revenue growth and improving operational performance. The company posted total revenues of $98.8 million for the quarter, reflecting a 26% year-over-year increase. Subscription revenue, which comprised 87% of total revenues, grew 22% to $85.7 million. Notably, revenues derived from software demonstration licenses contributed significantly, reaching $28.6 million. These demonstration licenses are provided to strategic partners like Microsoft and Amazon’s AWS, enabling them to independently present C3.ai’s applications to prospective enterprise clients.

A Look at C3.ai Stock Valuation

From a valuation standpoint, the company is currently trading at a slight premium relative to its industry but at a discount to historical metrics. Its forward 12-month price-to-sales (P/S) ratio sits below its one-year average. In terms of the forward 12-month Price/Sales, AI is trading at 5.71X, higher than the sector’s 5.39X.

How Should Investors Play With C3.ai Stock Now?

C3.ai's sharp stock decline in 2025 has created an attractive buying opportunity. Despite trading below key moving averages, the company is showing strong fundamentals—26% revenue growth, rising subscription sales, and narrowing losses. Strategic partnerships with Microsoft, Amazon’s AWS, and McKinsey are accelerating deal wins and global reach, while its leadership in Generative and Agentic AI is opening new, high-value use cases. With robust growth projections, improving analysts’ sentiment, and a discounted valuation, the company is well-positioned for a rebound, making now a compelling time for investors to consider buying the stock. C3.ai currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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