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Artificial intelligence (AI) has created trillions of dollars' worth of value for some of America's largest organizations over the last few years, but not every company in this booming industry has been a winner. C3.ai (AI +0.48%) stock, for instance, is down 22% in 2026 (as of the market close last Friday, Sept. 4), as investors abandon ship over the company's declining revenue and steep losses.

Last September, C3.ai's founder, Thomas Siebel, stepped down from his role as CEO to focus on his health issues. Since he played a central role in the sales and customer relationship management processes, his departure led to a sharp decline in the company's revenue.

Fortunately, Siebel returned to lead C3.ai in May, and he is determined to get things back on track. Is it time for investors to start buying the stock?

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A shift from AI applications to critical AI platforms Developing AI software applications from scratch can be extremely expensive, and it requires specialized technical expertise. Not every business has those resources, so they rely on service providers like C3.ai that can deliver turnkey solutions. But C3.ai's business model is changing -- it still has a portfolio of ready-made AI apps, but it's also becoming a platform provider.

The company launched the C3 Agentic AI Platform late last year, which is effectively an intelligent operating system for businesses. It gains a deep understanding of every existing entity, process, relationship, and piece of data within the enterprise, facilitating the creation of powerful agents that can automate tasks and make key operational decisions (with human permission).

One of the newest tools on the C3 Agentic AI Platform is C3 Code, an advanced programming tool that can build software based on instructions provided in plain English. In other words, it gives enterprises the ability to build their own applications at a lightning-fast pace, even if they don't have a team of world-class engineers.

C3.ai's pivot to become a platform provider is very important, because enterprise AI requires a unified whole-of-business approach. Deploying just one application isn't enough for the average enterprise to stay ahead of their competitors anymore; AI needs to be at the core of every process to maximize productivity and value.

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C3.ai expects sales to sink further C3.ai generated $250.3 million in total revenue during its 2026 fiscal year (ended April 30), a 35% decline from the previous year. The company then generated $52.4 million in revenue during its fiscal 2027 first quarter (ended July 31), a 25% year-over-year decline.

These poor results were a direct consequence Siebel's brief departure, but now that he is back on board, C3.ai's performance is expected to improve. Management's latest forecast suggests the company could deliver up to $240 million in revenue during fiscal 2027 overall, representing a much narrower year-over-year decline of 4% from fiscal 2026. Moreover, Siebel believes a return to sales growth could happen within the next two quarters.

C3.ai has completely restructured its sales department and dramatically cut costs to support its turnaround, which were necessary steps to keep its bottom line in check after its net loss soared by 63% to $470.3 million during fiscal 2026. The company still lost $92.8 million during the fiscal 2027 first quarter, but that was a 20% reduction from the year-ago result.

Plus, C3.ai was modestly free cash-flow positive to the tune of $2.1 million during the first quarter, so the bottom line is certainly trending in the right direction.

A beaten-down stock isn't necessarily a cheap stock C3.ai stock currently trades at a price-to-sales (P/S) ratio of 6.5, which is a discount to its five-year average of 9.4. However, because the company's revenue is forecast to shrink during fiscal 2027, its forward P/S ratio is actually higher than its trailing P/S ratio.

AI PS Ratio data by YCharts

In other words, C3.ai is more expensive when valued against its future financial results than it is today, which is precisely why investors typically avoid buying into shrinking businesses -- they tend to destroy shareholder value over time. However, since Siebel believes C3.ai will return to sales growth on a quarterly basis soon, this particular case might be an exception.

During the first quarter, the company experienced a 73% quarter-over-quarter increase in its gross bookings, which usually represent the value of signed contracts for services that will be delivered in the future. Bookings are often a useful predictor of revenue, so Siebel's optimism might be warranted.

With that said, it might be a good idea for investors to wait until C3.ai's sales actually return to growth before buying its stock, in order to minimize potential risks.

C3.ai (NYSE:AI) posted its fiscal 2027 first-quarter results after Wednesday’s closing bell, beating estimates on the top and bottom lines. Here’s a look at the details inside the report. 

AI stock is moving. Watch the price action here. C3.ai Q1 Details       C3.ai reported quarterly losses of 20 cents per share, which beat the Street estimate for losses of 25 cents, per Benzinga Pro data. 

Quarterly revenue came in at $52.38 million, which beat the analyst consensus of $52.12 million. Subscription revenue was $49.2 million and constituted 94% of total revenue.

“Revenue has stabilized, free cash flow is positive, operating loss has narrowed, and Forrester Research named C3 AI a leader in Enterprise AI,” said Thomas M. Siebel, CEO of C3.ai.

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“The plan is working, we are on track with laser-like management discipline to grow revenue, generate cash, attain non-GAAP profitability, maintain technology leadership and increase customer satisfaction,” Siebel added.

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AI Stock Price: According to data from Benzinga Pro, C3.ai stock was up 1.69% to $10.52 in Wednesday’s extended trading.  

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C3.ai (NYSE:AI | AI Price Prediction) currently trades at $10.18, while Wedbush Securities analyst Dan Ives carries a Street-high price target of $15 on the enterprise AI software company, implying roughly 47% upside from here. That headline number sits far above the broader Wall Street consensus, which has drifted lower after a brutal fiscal 2026.

C3.ai sells the C3 Agentic AI Platform and industry-specific enterprise AI applications, competing for federal, defense, and industrial AI dollars. Founder Thomas Siebel returned as CEO in June and personally bought 6.17 million shares at $11.16, betting his own capital on a turnaround.

A Revenue Collapse the Market Refuses to Look Past Fiscal 2026 revenue landed at $250.27 million, down 35.67% year over year, with Q4 showing revenue of $51.60 million, a 52.5% year-over-year decline. GAAP gross margin collapsed from 62% to 22%, and full-year free cash flow deteriorated to negative $192.14 million.

Siebel called the recent sales performance “unspeakably horrible” and said “sales just fell off the cliff” across the last five quarters. FY2027 revenue guidance of $210 million to $240 million implies further shrinkage before recovery. Shares are off 45.27% over the past year and 24.48% year to date. Securities class actions emerged after the Q1 FY2026 disclosure around Siebel’s earlier health issues.

Why Ives and Wedbush Are Still Betting on a 50% Rebound Ives maintains an Outperform rating with the $15 target, the Street-high across all coverage. His thesis rests on three pillars: C3.ai as an early enterprise pure-play for federal and commercial generative AI adoption, the shift toward consumption-based pricing to lower deployment friction, and a partner-led motion through Microsoft Azure, AWS, and Google Cloud.

Q3 FY2026 bookings from federal, defense, and aerospace grew 134% year over year and reached 55% of total bookings. The joint qualified pipeline with Microsoft grew 146% year over year, and the AWS joint pipeline grew 172%. That aligns with a Pentagon budget request calling for $58.5 billion for AI in FY2027.

Broader Wall Street remains skeptical. Of 14 covering analysts, the breakdown is 0 Strong Buy, 1 Buy, 7 Hold, 3 Sell, and 3 Strong Sell, with an average target of just $8.82, below the current quote. Siebel’s message was blunt: “Game on.”

How C3.ai Stacks Up Against Its AI Software Peers AI software names with real revenue growth have held up while C3.ai has been isolated.

Palantir (NASDAQ:PLTR) trades near $178.65 against a $191.68 target, roughly 7% upside. Q2 revenue climbed 92.8% to $1.94 billion, and 20 Buys against 10 Holds reflect steady enthusiasm.

SoundHound AI (NASDAQ:SOUN) sits near $7.98 with a $12.71 target, implying roughly 59% upside. Six Buys and two Holds, with Q2 revenue up 45% to $61.9 million.

BigBear.ai (NYSE:BBAI) trades near $3.26 against a $4 consensus, or about 23% upside. Coverage is thin at one Buy and two Holds.

Ives’ $15 call on C3.ai represents a wider gap than any peer average, signaling the market treats C3.ai as an execution story rather than a sector story.

The Data Behind a Bearish Consensus and a Bold Outlier C3.ai trades at $10.18 with a $8.82 consensus target across 14 analysts, meaning the average view implies roughly 13% downside. Ives’ $15 target drives the 50% upside narrative.

Shares are down 24.48% year to date while the S&P 500 has gained 14.07%, a staggering relative gap. Beta sits at 2.07, and Polymarket bettors put implied bankruptcy odds by year-end 2026 at 13.5%, down from a month earlier.

My Take: A Deep Value Bet on One Man’s Reputation The bull case strengthens if the Siebel-led restructuring shows quantifiable sales productivity gains within two quarters, federal bookings continue tracking at more than half of total, and Microsoft and AWS partner pipelines convert into recognized revenue. Ives’ $15 target requires that trajectory to materialize before FY2028.

The bear case builds if Q1 FY2027 misses the $50 million to $54 million guide, gross margin fails to recover from 22%, or class action litigation escalates. With free cash flow at negative $192 million and cash burn accelerating, patience has a cost.

The skeptical lean prevails. Siebel’s insider buy and blunt accountability are genuine positives, but the average analyst target sitting below the current price tells you where the weight of evidence rests. This is a turnaround bet, and the market is charging full price to take it.

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