C3.ai (AI 3.87%) is a popular artificial intelligence (AI) investment choice, as its plug-and-play AI solutions have gained significant popularity with clients. C3.ai has also secured several key government contracts, establishing a strong client base in both the commercial and government sectors.
The stock hasn’t had the greatest year, as it has fallen around 25% so far in 2025. But nothing is stopping the stock from turning around, especially if the company continues to post stellar growth rates. So, is C3.ai worth investing $1,000 into right now? Let’s find out.
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C3.ai doesn’t have a lot to differentiate itself from competitors
C3.ai touts its enterprise AI platform, which allows clients to integrate various pre-built applications into their businesses. These products range from inventory management to smart lending in financials to clinical trial management in the healthcare field. There are numerous use cases for C3.ai’s solutions in nearly every industry, providing a substantial market to address as AI continues to become more integrated into the business world.
C3.ai is also rolling out AI agents that can perform tasks in place of humans. Many repetitive tasks can be easily automated with AI agents, enabling businesses to become more efficient with widespread deployment.
C3.ai’s offerings are quite similar to those of many other AI companies, and there isn’t much that sets it apart. This is important to consider if you’re thinking of investing in C3.ai, as it could be upended by a specific offering from a company more focused than C3.ai.
Still, it’s delivering excellent growth, with revenue for fourth-quarter fiscal year 2025 (ending April 30) rising 26% year over year to $109 million. That represents a slight increase from the total FY 2025 growth rate of 25%, indicating that revenue could be on the rise. However, management threw some cold water on that increase, as it expects $466 million of revenue at the midpoint, indicating 20% revenue growth for FY 2026.
Several AI-related companies are growing much faster than that, so why would investors want to take a chance on C3.ai?
C3.ai’s stock looks cheap compared to its peers’
Compared to many other AI software stocks, C3.ai comes with a pretty cheap price tag. The stock trades for about 8.6 times sales, which is significantly cheaper than the typical 10 to 20 times sales at which most software companies trade.
AI PS Ratio data by YCharts.
This gives investors some hope that they’re buying a bargain stock. A software company growing sales at a 20% pace, trading at less than 10 times sales, is a pretty good deal.
But there’s still one massive red flag that investors need to be aware of. In its pursuit of capturing as much market share as possible, C3.ai isn’t focusing on profitability. While this shouldn’t come as a surprise to most investors who follow this space, the level of unprofitability might.
AI Operating Margin (Quarterly) data by YCharts.
C3.ai has consistently posted an operating loss margin of more than 80% over the past four quarters, indicating that it is spending nearly twice as much as it generates in revenue. That’s unsustainable and is a deep hole to dig out of when C3.ai eventually attempts to flip the switch to become more profitable.
With C3.ai’s relatively slow growth rate compared to its AI peers, combined with its deep unprofitability, I think there are far better AI stocks to invest in. There isn’t enough growth to justify the risk of owning C3.ai, and I think investors should consider other stocks to purchase with $1,000.