Shares C3.ai (NYSE: AI ) It fell a staggering 27.8% in February, according to data from S&P Global Market Intelligence. A company that markets itself as an enterprise artificial intelligence (AI) operator, the business has clearly not yet benefited from the AI revolution, as revenue has started to move in the wrong direction with unfavorable profit margins. The stock is down 90% from its high since going public in late 2020.
Here’s why the stock fell in February, and whether you should finally take the dip in C3.ai stock for your portfolio.
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Management pitches to C3.ai as such player Palantir Technologiesselling custom AI services to enterprises to help them get better at what they do. The problem is, it doesn’t seem to be very good.
Revenue was a little over $53 million last quarter, down from $99 million in the same period last year. We are supposedly in the midst of a revolution in AI applications that is sweeping the world, and yet C3.ai’s revenue has nearly halved from last year. This shows that customers are not switching to its custom software products, leading to contract non-renewal.
The company is surprisingly very unprofitable. The operating loss was $140 million last quarter, more than double top-line revenue. Free cash flow was negative $126 million over the trailing twelve months, which goes to cash reserves on the balance sheet.
A true AI company like Palantir can grow while making solid profits. Its revenue was $4.47 billion in 2025, with free cash flow of more than $2 billion. As a primary competitor to C3.ai, there is a big difference between these two businesses and how they attack the enterprise AI market.
Now, C3.ai is trading at a low price-to-sales ratio (P/S) of 4, its lowest level in history. However, a company that is losing money with declining revenues is never worth anything, no matter how low the stock falls. This should keep any investor away from this stock, even after last month’s 28% fall.
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