Shares of C3.ai Inc AI are continuing their decline on Thursday as the enterprise artificial intelligence company grapples with the fallout from a dire preliminary earnings report. The stock has fallen over 20% in the past five trading sessions, reacting to news released late last week.
What To Know: The sharp downturn began after C3.ai warned of a significant first-quarter revenue shortfall. The company now expects first-quarter revenue to be between $70.2 million and $70.4 million, well below the Wall Street consensus estimate of $104.1 million.
This figure also represents a substantial decrease from the $87.2 million in revenue generated during the same period last year. The company anticipates a GAAP operating loss widening to approximately $124.7 million, compared to a $72.59 million loss a year earlier.
CEO Thomas Siebel labeled the preliminary results “completely unacceptable,” attributing the poor performance to disruptions from a recent sales and services reorganization and his own significant health problems.
Following the news, DA Davidson downgraded the stock from Neutral to Underperform, slashing its price target to $13 from $25. C3.ai has initiated leadership changes and a search for a new CEO as it looks to regain momentum. The company will release its full first-quarter results on September 3.
Benzinga Edge Rankings: According to Benzinga Edge stock rankings, which score companies on four critical factors, C3.ai shows significant weakness.
Its Momentum score is a very low 8.37, reflecting the strong negative price trend and recent selling pressure. The Growth score is also poor at 21.44, consistent with the company’s sharp revenue shortfall and operational challenges.
In contrast, the Value score stands at a more moderate 59.18, suggesting that after the steep price drop, the stock may be perceived as having some underlying value relative to its assets or long-term potential, though it currently faces severe headwinds in its operational performance and market sentiment.
Price Action: According to data from Benzinga Pro, AI shares are trading lower by 3.5% to $17.96 Thursday morning. The stock has a 52-week high of $45.08 and a 52-week low of $14.70.
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How To Buy AI Stock
Besides going to a brokerage platform to purchase a share – or fractional share – of stock, you can also gain access to shares either by buying an exchange traded fund (ETF) that holds the stock itself, or by allocating yourself to a strategy in your 401(k) that would seek to acquire shares in a mutual fund or other instrument.
For example, in C3.ai’s case, it is in the Information Technology sector. An ETF will likely hold shares in many liquid and large companies that help track that sector, allowing an investor to gain exposure to the trends within that segment.
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