Shares in C3.ai plunged Thursday on a full-year fiscal 2024 revenue outlook that fell short of analyst estimates. AI stock had gained 257% in 2023 prior amid hype over artificial intelligence stocks.
C3.ai preannounced some fiscal fourth-quarter results in mid-May. It issued its 2024 outlook and full fourth-quarter results after the market close on Wednesday.
For full year fiscal 2024, which starts with the July quarter, C3.ai predicted revenue in a range of $295 million to $320 million. But analysts had called for revenue growth of 19% to $317 million, according to FactSet, meaning the company's outlook missed at the midpoint.
Fiscal 2023 revenue rose only 5.6% to $266.8 million, slowing from 38% growth the previous year. C3.ai expects revenue growth to reaccelerate as more pilot projects ramp up production.
In the April quarter, C3.ai said it lost 13 cents per share on an adjusted basis versus a 21-cent loss a year earlier. C3.ai said it expects an adjusted operating income loss in a range of $50 million to $75 million in fiscal 2024.
Analysts projected an operating income loss of $61.8 million.
AI Stock: Shares Plunge
AI stock tumbled 13.2% to close at 34.72 on the stock market today. In Wednesday's regular session, shares fell nearly 9%. Further, the stock has been wildly erratic of late as shares rocketed 33% higher on Tuesday.
In a note to clients, JPMorgan analyst Pinjalim Bora said: "While we continue to assess the assumptions around the consumption based pricing model and its implications to the total growth as well as the profitability profile of the business, we remain on the sidelines as the company navigates a business-model transition in the thick of a challenging macro backdrop and view the current multiple of revenue as stretched given the hype around artificial intelligence, in general,"
Meanwhile, shares in C3.ai had surged in 2023 amid buzz over startup OpenAI, ChatGPT and generative AI technology. In the April quarter, C3.ai says it closed three generative AI deals.
C3.ai is one of many AI stocks to watch. Also, C3.ai had a Relative Strength Rating of 98 out of a best-possible 99 heading into the earnings report, according to IBD Stock Check-up.
C3.ai's initial public offering in early December 2020 raised $651 million.
The software maker helps companies build artificial intelligence applications. It targets the energy, financial services and defense markets. In December, the enterprise AI software provider changed its pricing model from subscription to consumption-based.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.
