C3.ai Inc. (NYSE: AI) stock shrugged off an initial round of selling and was up about 3% in mid-day trading on heavy volume. This came the day after the company reported earnings for the second quarter of its 2025 fiscal year. C3.ai stock had dropped about 10% in the premarket as investors reacted to the company’s quarterly report.
The report's headline numbers beat expectations. The company generated $94 million in revenue, which was above expectations of $91 million. That was a 29% year-over-year (YoY) increase in revenue growth and a 22% YoY increase in subscription revenue growth. This was the seventh consecutive quarter of increasing revenue growth. The company also raised its revenue target for the coming quarter and the full fiscal year.
On the earnings front, C3.ai reported a narrower-than-expected earnings per share (EPS) loss of six cents. Analysts had been forecasting a loss of 14 cents per share. However, the issue troubling many investors is the company’s path to profitability. As we head into 2025, investors seem willing to accept that valuations are extended. Outside of some black swan event, that’s not likely to change.
