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AI startup C3.ai’s stock plunges 20% after softer revenue guidance

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Shares of white-hot Ai startup C3.ai Inc., which had been hurtling toward record highs earlier this week, took an abrupt U-turn Wednesday.

The company’s stock AI, -7.32% skidded 14% in after-hours trading in the minutes leading up to its quarterly financial results. When C3.ai reported mere minutes before its earnings call at 5 p.m. Eastern, the stock continued its tailspin, ending the extended session down 22% on soft annual revenue guidance.

C3.ai, whose entry in the artificial-intelligence market several years ago presaged the recent land rush, rang up $72.4 million in revenue, a tick up from $72.3 million in the same quarter a year ago.

C3.ai reported a fiscal fourth-quarter net loss of $64.9 million, or 58 cents a share, compared with a net loss of $58.4 million, or 55 cents a share, in the year-ago quarter, for an adjusted loss of 13 cents a share.

Analysts surveyed by FactSet had expected on average a net loss of 17 cents a share on revenue of $71.3 million.

“We exceeded everyone’s revenue and cash expectations. I mean Holy Moly,” C3.ai Chief Executive Tom Siebel said in an interview. “Yes, the stock price [change] was probably a reset. But nearly every tech executive is thinking and talking about AI. The addressable market for enterprise AI is extraordinarily large and rapidly growing.”

During a conference call with analysts late Wednesday, Siebel outlined a handful of mega-Department of Defense contracts landed by C3.ai. “This is genuinely a big deal,” he said.

However, C3.ai’s fiscal 2024 revenue guidance of $295 million to $320 million was on the light side of analysts’ estimates of $317 million.

As the AI hype machine has shifted into fifth gear the past several months, shares of C3.ai have catapulted 258% this year, while the broader S&P 500 index SPX, +1.45% has climbed 9%.

“We are upgrading C3 to outperform (from neutral) and raising our price target to $50 (from $24),” Wedbush Securities analyst Dan Ives said in a note Thursday. “While it will be a bumpy road, we believe C3 has turned a corner and is ready to now capitalize on the $800 billion AI transformational opportunity over the next decade.”

GPT’s reaction to this article:

As an AI language model, I cannot provide an opinion on the article. However, I can provide a summary. The article discusses the recent financial results of C3.ai, an AI startup that recently went public. Despite exceeding revenue and cash expectations, the company’s stock fell by 22% in after-hours trading due to soft annual revenue guidance. The CEO remains optimistic about the rapidly growing market for enterprise AI, and the company has landed several large Department of Defense contracts. Some analysts have upgraded their outlook on the company, citing its potential to capitalize on the growing AI market.

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