AI Stock Gains 8% on Monday After Steep 3-Month Drop: Buy Now or Wait? | Nasdaq

This Zacks Investment Research analysis examines C3.ai's recent 8.2% stock surge following a challenging three-month period where shares tumbled 27.7%.

C3.ai faces significant headwinds including a 20% revenue decline, widened losses, and execution problems stemming from sales leadership disruptions and reduced founder involvement. The enterprise AI company struggles with converting pilot programs to profitable deployments while facing intense market competition. However, the company maintains strong partnerships with major cloud providers, an expanding customer base with notable contract wins, and over 131 ready-to-deploy AI applications that could drive future growth.

• Revenue dropped nearly 20% year-over-year with negative free cash flow raising profitability concerns
• Leadership changes and founder health issues disrupted sales processes, causing "unacceptable" performance
• Strategic partnerships with Microsoft Azure, AWS, and Google Cloud, plus 90% of new business flowing through partners
• Trading at attractive 8.44 forward P/S ratio compared to competitors like Palantir's 79.1 ratio