Key Points
Preliminary Q1 2026 results include a nearly 20% year-over-year decline in revenue.
The company is in the midst of trying to replace its CEO, Tom Siebel.
While it’s likely the company will continue to struggle, C3.ai stock now trades at a discount compared to much of the competition.
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Shares of C3.ai (NYSE: AI) are falling hard on Monday, down 25.4% as of 2:33 p.m. ET. The drop comes as the S&P 500 and Nasdaq Composite were mostly flat.
The artificial intelligence (AI) company is seeing its share price hit after the release of its preliminary numbers for the quarter ending July 31.
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C3.ai shares plunge after it shares its preliminary Q1 2026 results
C3.ai’s first-quarter 2026 preliminary numbers showed a net generally accepted accounting principles (GAAP) loss of between $124.7 million and $124.9 million on sales of between $70.2 million and $70.4 million, a nearly 20% decline year over year in its top line and 33% below its previous guidance. D.A. Davidson analyst Gil Luria called the results “catastrophic” and downgraded the rating from neutral to underperform.
The company is in the middle of a search for a new CEO after the announcement that Tom Siebel would be stepping down from the role, a major factor in its underwhelming results.
Image source: Getty Images.
Additionally, C3.ai announced that it had completed a significant restructuring of its sales and services divisions to “accelerate growth and increase customer success” after what Siebel called the company’s “completely unacceptable” Q1 performance.
C3.ai problems are likely to continue, but a lower share price could make this a buying opportunity
C3.ai is obviously in some hot water and is struggling to close deals amid the exit of its CEO. I don’t want to discount the direction of C3.ai’s sales at the moment and its continued unprofitability. If the company names the right person as CEO, there’s plenty of reason to believe C3.ai can right the ship.
Given how much the share price has dropped, this could present a buying opportunity. C3.ai now trades at a discount compared to some of its closest competitors. Of course, I don’t want to imply the stock is cheap in general — AI stocks are anything but cheap — but comparatively so.
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Johnny Rice has no position in any of the stocks mentioned. The Motley Fool recommends C3.ai. The Motley Fool has a disclosure policy.
