C3.ai receives downgrade due to weak preliminary Q1 results: Oppenheimer

[C3.ai]
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C3.ai (NYSE:AI [https://seekingalpha.com/symbol/AI]) was downgraded to Perform from Outperform by Oppenheimer due to weaker-than-expected preliminary results for the first quarter of fiscal 2026.

Oppenheimer also removed its $45 price target on the stock.

Shares had jumped 5% by noon trading on Wednesday.

"The company significantly lowered revenue expectations for 1Q26, from ~$105M to ~$70M, implying a 35% sequential decline and a major concern given the recurring nature of its Subscription revenues, suggesting the services are not working as advertised," said Oppeheimer analyst Timothy Horan, in an investor note. "Non-GAAP operating loss was also increased, from -$29M to -$58M."

"We are concerned that these results indicate secular weakness in underlying trends," Horan added. "The company is very difficult to forecast, but we are reducing estimates dramatically. Hopefully the earnings call provides more color."

Oppenheimer reduced its full-year fiscal 2026 revenue estimate to $291M from $464M. It reduced its first quarter estimate to $70.3M from $104M.

C3.ai is expected to release its first quarter fiscal 2026 financial results post-market on September 3.

The company has restructured i [https://seekingalpha.com/news/4482991-c3ai-shakes-up-global-sales-team-after-slashing-revenue-outlook-by-33]ts global sales and services organization, including new leadership, after projecting preliminary revenue of $70.2 million-$70.4 million, roughly 33% below the midpoint of its prior outlook.

"The good news is we have completely restructured [https://seekingalpha.com/pr/20195383-c3-ai-restructures-sales-and-services-organizations-to-accelerate-growth#hasComeFromMpArticle=false#source=section%3Amain_content%7Cbutton%3Abody_link%7Cfirst_level_url%3Anews]the sales and services organization ... The bad news is that sales results in Q1 [https://seekingalpha.com/pr/20195381-c3-ai-fiscal-first-quarter-2026-preliminary-financial-results#hasComeFromMpArticle=false#source=section%3Amain_content%7Cbutton%3Abody_link%7Cfirst_level_url%3Anews] were completely unacceptable," said Thomas Siebel, Chairman and CEO, C3 AI.

Siebel is also stepping down due to health issues.

C3.AI provides artificial intelligence-powered software solutions for enterprises, such as agents and model-building tools.

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