Chicago, IL – May 14, 2025 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: C3.ai, Inc. AI, UiPath Inc. PATH, Microsoft MSFT, Alphabet GOOGL and Amazon AMZN.
C3.ai, Inc. and UiPath Inc. are both high-profile players in the booming AI automation sector. C3.ai specializes in enterprise AI applications, including predictive maintenance and generative AI tools, while UiPath leads in robotic process automation and is evolving toward “agentic AI” solutions. Both companies have seen recent momentum amid the broader artificial intelligence hype. In 2025, each presents a distinct case: C3.ai is smaller but growing faster, whereas UiPath is larger with more stable financials.
These companies stand at the intersection of two of the fastest-growing trends—AI and digital transformation—making them compelling candidates for investors eyeing long-term technology disruption. Recent volatility in both stocks, coupled with evolving enterprise spending patterns and new product developments, has reignited interest in evaluating their investment potential. With macroeconomic uncertainty pressuring tech valuations and AI narratives driving short-term sentiment, now is an opportune time to assess which stock holds more promise.
Let’s dive deep and closely compare the fundamentals of the two stocks to determine which one is the better investment at present.
C3.ai markets itself as an enterprise AI pure play, offering a suite of prebuilt, configurable AI applications that help large organizations implement predictive analytics, detect anomalies, and optimize operations. In theory, this makes its platform highly scalable across sectors. C3.ai has positioned itself as a pure-play enterprise AI software company, offering a broad portfolio of over 100 pre-built AI applications across various industries, including energy, manufacturing, and financial services. Central to the company’s growth strategy is its deepening alignment with major cloud providers and government institutions, designed to accelerate go-to-market efforts and extend distribution scale.
C3.ai’s strengths center on its leadership in enterprise AI. The company claims first-mover status in “model-driven” AI applications, having expanded across numerous industries (19 in total) and the U.S. federal government, where federal revenues grew more than 100% in fiscal 2024. The company has secured large customers and pilots — recent announced deals include oil & gas supermajors, the U.S. Navy, BASF and multiple state/local governments. Strategic partnerships bolster C3.ai’s reach.
For example, C3.ai is the most sought-after AI application on Microsoft’s Azure cloud marketplace. It has a tie-up with Alphabet’s Google Cloud and Amazon’s Amazon Web Services. Since announcing an expanded alliance with Microsoft 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. These factors suggest that there will be continued opportunities as companies seek AI tools to streamline processes and decision-making.
In its fiscal third-quarter results, C3.ai reported total revenues of $98.8 million, marking a 26% increase year over year. Subscription revenues grew 22% year over year to $85.7 million, constituting 87% of total revenues. The company closed 66 agreements, including 50 pilots, a 72% increase year over year.
C3.ai faces significant challenges, including the need to achieve sustainable profitability and navigate competition from both established players and emerging startups. The company reported GAAP net loss of 62 cents per share in the fiscal third quarter (non GAAP loss of 12 cents per share). The company anticipates some moderation in gross margins due to an increased mix of more costly pilots. It expects some moderation in operating margins in the near term due to additional investments in the business.
Although cash reserves are large ($724.3 million at the fiscal third-quarter end), continued losses raise the risk of dilution or spending pressure. Competition is fierce – from other AI startups to tech giants building in-house AI solutions, which could pressure C3.ai’s growth or pricing. Growth also appears to be moderating after a surge in activity. Revenue growth rate decreased from 29% in the fiscal second quarter to 26% in the fiscal third quarter.
UiPath operates in the adjacent, yet distinct, space of robotic process automation. Its platform automates rule-based, repetitive digital tasks—freeing up human workers and reducing costs for businesses. In contrast to C3.ai’s focus on predictive analytics and machine learning, UiPath emphasizes process optimization, task mining, and digital workflow orchestration. This has enabled it to gain broad adoption across banking, insurance, healthcare, and public sector clients.
UiPath’s strengths lie in its market leadership and innovation. UiPath has a large global customer base and high retention (net retention approximately 110–115%), meaning existing accounts keep expanding. Management notes that 90% of surveyed enterprises see opportunities for agentic AI in their workflows, suggesting a large addressable market ahead. Furthermore, UiPath enjoys very high gross margins (85% non-GAAP in the fiscal fourth quarter) and has been streamlining its cost structure, supporting improved profitability.
UiPath’s business and financial profile contrast sharply with C3.ai’s. UiPath is much larger and has recently been moving toward profitability. In fiscal 2025 (ended Jan. 31, 2025), UiPath reported revenues of $1.43 billion, up 9% year over year. In the fiscal fourth quarter (October 2024–January 2025), revenues were $424 million (up 5%). Its subscription and recurring model yields stable bookings — year-end Annual Recurring Revenue (ARR) was $1.666 billion (up 14%).
Crucially, UiPath generated a GAAP operating profit of $34 million in the fiscal fourth quarter (versus a year-ago loss) and $241 million of non-GAAP operating income for the full year. Free cash flow was robust, reaching $328 million in fiscal 2025. The company ended the year with about $1.7 billion in cash on its balance sheet and launched a $500 million share buyback program, announced during the fiscal second quarter. These figures point to a healthy, cash-generative model, despite modest growth.
On the other hand, UiPath faces challenges. Its revenue growth rate has slowed to mid-single digits (10% in the fiscal second quarter, 9% in the fiscal third quarter, 5% in the fiscal fourth quarter) as large enterprises moderate spending. Global economic uncertainty — especially in the U.S. public sector — has pressured guidance. Competition is fierce: Microsoft (Power Automate), Automation Anywhere, Blue Prism, and even open-source tools vie for the automation market. UiPath remains unprofitable on a GAAP basis for the year (fiscal 2025 GAAP operating loss was $163 million), though it expects to sustain profitability going forward.
PATH (up 3%) has performed better than AI (down 29.7%) so far in 2025. Over the past month, PATH has gained 22.2%, more than AI’s 20.6% rally.
C3.ai is trading at a forward 12-month price-to-sales (P/S) ratio of 6.7X, below its three-year median of 8.33X and the Zacks Computer and Technology sector average of 5.74X. PATH’s forward earnings multiple sits at 4.63X, below its three-year median of 6.41X. The C3.ai stock appears expensive when compared with the sector average and PATH.
While both companies operate in the AI automation space, UiPath’s valuation metrics suggest a more balanced investment profile, with expectations of future profitability and valuations in line with industry norms. C3.ai carries a higher valuation premium and lacks current profitability, which may present greater investment risk.
The 2025 EPS estimates have trended upward over the past 60 days for PATH stock while the same remained unchanged for C3.ai. The Zacks Consensus Estimate for C3.ai’s 2025 bottom line suggests a 4.3% improvement, while that for PATH indicates a year-over-year decline of 1.9%.
Both C3.ai and UiPath are positioned to benefit from the continued interest in AI-driven automation, but their risk/reward profiles differ. C3.ai offers higher growth potential, with the Zacks Consensus Estimate indicating 29.7% revenue growth in fiscal 2025, and first-mover advantages in the enterprise AI market. However, it is still unprofitable, burning cash. In contrast, UiPath is larger and almost cash-flow positive. It generates profits on a non-GAAP basis, boasts a strong balance sheet, and recently returned capital via a $500 million buyback.
In a nutshell, C3.ai’s upside depends on sustaining rapid growth and successfully scaling new AI offerings, which is far from certain, given competition and macro risks. UiPath, while growing more slowly, has a more proven business model and valuation that is easier to justify. UiPath — a Zacks Rank #3 (Hold) company – appears to offer better upside potential in 2025.
Its combination of profitability, strong cash flow, and reasonable valuation makes it more resilient if growth disappoints. C3.ai — a Zacks Rank #4 (Sell) company — could outperform on strong AI tailwinds, but it is riskier and richly priced. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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