C3.ai Earnings Beat Expectations Amid Mixed Analyst Outlook

C3.ai (NYSE: AI) reported better-than-expected earnings for Q2 2026, with earnings per share of -$0.25 compared to a forecast of -$0.33. Revenue reached $75.1 million, exceeding the estimated $74.86 million. The stock rose 6.61% following the release, closing at $14.37.

Subscription revenue grew 16.5% quarter-over-quarter, supported by partnerships with Microsoft and AWS. These collaborations accounted for 89% of the company's bookings through the partner ecosystem. The company holds $675 million in cash, despite a non-GAAP operating loss of $42.2 million for the quarter.

CEO Stephen Ehikian emphasized the growing deployment of enterprise AI solutions, stating that demand for C3.ai's offerings is accelerating. He noted a shift from experimentation to full-scale adoption of enterprise AI technologies.

Why Did This Happen?

C3.ai's earnings beat was driven by improved performance in subscription revenue and strategic partnerships. The company reported a non-GAAP gross margin of 54%, indicating better cost management despite ongoing losses.

The Q3 2026 revenue guidance was set at $72-80 million, with full-year 2026 revenue expected to range from $289.5-309.5 million. This forecast reflects cautious optimism, accounting for competitive pressures and economic uncertainties.

What Are Analysts Watching Next?

Institutional investors have shown varied activity in C3.ai shares. Bogart Wealth LLC increased its stake by 22.7%, while NewEdge Advisors LLC raised its position by 48.7% in the first quarter of 2026.

Chairman Thomas Siebel sold 309,589 shares of C3.ai stock in late January, reducing his holdings by 32.87%. The transaction was valued at $4.19 million, with the shares sold at an average price of $13.52.

Analysts have issued mixed ratings for C3.ai stock. Wedbush reaffirmed an "Outperform" rating with a $20.00 price target, while DA Davidson reiterated an "Underperform" rating with a $13.00 target. The consensus rating is "Reduce," with an average target price of $21.92.

What Are the Risks?

C3.ai faces challenges from competitive pressures and economic uncertainties. While the company's enterprise AI solutions are gaining traction, its revenue declined 20.3% year-over-year in Q2 2026.

The company's high beta of 1.97 and negative net margin of 108.06% indicate significant volatility and unprofitability. Analysts continue to monitor C3.ai's path toward profitability and its ability to maintain market share amid evolving technologies and competition.