C3.ai shares tumble as AI software company reverses profitability projection

Points to remember

C3 .ai lowered its profitability forecast for this fiscal year and its shares fell.
The AI software company said it had decided to #39;invest more in its generative AI solutions.
CEO Thomas Siebel said the company plans to seize opportunities for increased AI growth.

Shares of C3.ai (AI) fell more than 12% on Thursday after the maker of enterprise artificial intelligence (AI) application software warned that it would not would not become profitable as quickly as expected. it spends more on this burgeoning technology.

C3.ai recorded a loss in the first quarter of fiscal 2024 of $0.09, less than in 2022 and better than expected. Revenue rose 10.8% to $72.36 million, also above estimates. However, the gross margin of 69% was below expectations.

The company has indicated that “After careful consideration,” it decided to invest in lead generation, branding, market awareness, and customer success related to its generative AI solutions. For this reason, C3.ai has stated that it does not expect to be non-GAAP profitable at year end, as previously reported.

Founder and CEO Thomas Siebel said that even while the company always believed that the AI market would be quite large, “no one could have predicted the size and growth rate” we are currently seeing. He added that C3.ai has spent the past 14 years preparing for this opportunity and that “we will seize it”.