Is The Stock with Ticker AI Finally a Buy?

C3.ai shares are back at price levels investors haven’t seen since early 2023, and the reasons are downright concerning.

The artificial intelligence firm with ticker AI has endured a brutal year that began in January when the share price was cut in half. The torpedos keeping hitting the bow, as evidence by the latest business update that pointed to a steep revenue shortfall.

It gets worse, founder-CEO Tom Siebel is stepping aside due to health concerns. That combination has Wall Street wondering whether the business can stand on its own without him. Is the worst in the rearview mirror or is there more downside to come?

Key Points

• C3.ai slashed its Q1 revenue forecast to about $70 million, far below its earlier guidance.

• Founder-CEO Tom Siebel is stepping down due to health issues, and the heavy reliance on him to drive sales raises concerns about future growth.

• With poor financials, lack of profitability, and a fragile sales model tied too closely to its CEO, C3.ai may be on the precipice.

Forecast That Shocked Investors

Management hasn’t officially reported its fiscal first-quarter results yet, but they gave investors an early look at how things turned out.

Revenue is expected to land just above $70 million for the quarter, nowhere near the $100 million plus that the top brass had guided back in May.

For context, not only is this nearly a 20% year-over-year drop, but it’s also a massive miss on their own projections. Unsurprisingly, investors sold first and asked questions later.

Siebel himself called the results “completely unacceptable,” blaming both the company’s internal reorganization and his own health challenges, which he said limited his ability to directly influence sales.

Does Siebel Stepping Down Expose Fragile Model?

Leadership transitions always introduce uncertainty, but the idea that one executive’s reduced involvement has the ability to tank revenue to this degree is troubling. C3.ai markets its software as a ready-to-deploy AI platform, solutions that, in theory, should be straightforward for customers to adopt.

If sales momentum depends so heavily on Siebel personally being in the room, it raises questions about whether the products themselves can stand on their own, and how scalable the model is at all.

That makes the choice of successor all the more critical, and if the next CEO lacks Siebel’s ability to close deals, revenue challenges may persist or even worsen.

Riskier Bet Than Before?

This situation highlights a problem investors don’t often see in larger tech businesses, that being sales processes tied too closely to one individual. Ideally, a CEO should be steering long-term strategy, not acting as the primary driver of revenue growth. When that line blurs, it highlights fragility.

C3.ai was already a speculative stock given its lack of consistent profitability. Now, with disappointing guidance, a CEO transition, and doubts about how repeatable its sales model really is, the risk profile has only grown.

The shares may look cheap compared to where they once traded, but that doesn’t automatically make them a bargain. Until C3.ai proves it can generate stable growth without leaning on Siebel, investors may be better off watching from the sidelines.