AI Is No Savior When Markets Get Tough ... But It Can Help, Says Nickel Digital Chief

C3.ai Inc. reported results for Q2 2026 that exceeded expectations, with earnings per share of -$0.25 versus the forecast of -$0.33. Revenue reached $75.1 million. The company's subscription revenue surged 16.5% quarter-over-quarter.

The firm maintains a strong cash position of $675 million despite a non-GAAP operating loss of $42.2 million. CEO Stephen Ehikian emphasized the shift in enterprise AI from experimentation to full-scale deployment.

Palantir Technologies delivered a strong Q4 2025 performance, with U.S. commercial revenue growing 137% year-over-year to $507 million. Total revenue for the quarter was $1.407 billion, easily surpassing Wall Street's consensus estimate.

Why Did This Happen?

Palantir's growth was driven by its Artificial Intelligence Platform (AIP) and its AI Forward Deployed Engineers, which automate complex data transformations. The company's U.S. government revenue also saw a 66% increase to $570 million, supported by defense contracts.

C3.ai, in contrast, faces challenges including a leadership transition and falling revenues. Its 52-week low reflects ongoing difficulties in the competitive enterprise AI landscape.

How Did Markets React?

Following the Q2 2026 earnings report, C3.ai saw a 4.42% increase in stock price to $14.37. Palantir's shares surged 11% in a single session following its Q4 2025 report.

Palantir's results have set a new benchmark in the AI economy. The company's Rule of 40 score reached 127%, signaling disciplined profitability and high-growth momentum.

What Are Analysts Watching Next?

C3.ai provided Q3 2026 revenue guidance of $72-80 million and full-year revenue projections of $289.5-309.5 million. These forecasts come amid potential challenges from competitive pressure and economic uncertainties.

Palantir expects to maintain exceptional profitability, with adjusted operating income guidance of around $4.13 billion and free cash flow projected between $3.9 billion and $4.1 billion for 2026.

Analysts are monitoring whether C3.ai can maintain its growth trajectory, particularly as it faces leadership changes and a challenging competitive landscape.

Palantir's ability to replicate its success in international markets is also a key focus for investors. While U.S. commercial demand is robust, international expansion has lagged due to procurement complexity and institutional barriers.

The broader market is assessing how AI-driven platforms will continue to reshape traditional software and data management models. Companies like Snowflake and Salesforce face increased scrutiny as their growth rates decelerate.

Investors are watching the shift toward agentic AI—autonomous systems that execute workflows—as a defining technological trend in 2026. This shift is expected to influence regulatory developments and data sovereignty policies.

Enterprise AI is no longer a speculative concept but a core operational tool. As the market recalibrates, the companies that deliver measurable value through automation and high-margin software will gain investor favor.

The current environment favors firms that can demonstrate both profitability and scalable AI deployments. C3.ai and Palantir represent different approaches to this challenge, with varying execution speeds and strategic priorities.

Looking ahead, the focus for AI-driven enterprises will be on maintaining momentum, diversifying revenue streams, and navigating regulatory landscapes as automation becomes more embedded in business operations.