C3.ai Shares Dip on Siebel Sale, Deepening Investor Concerns

C3.ai (NYSE:AI) chairman Thomas Siebel sold 543,706 shares of the company on Nov. 11 at an average price of $15.24, raising nearly $8.3 million and reducing his stake by 27.45%. Siebel now holds about 1.44 million shares, valued at roughly $21.9 million. The transaction was disclosed in a filing with the Securities and Exchange Commission.

The move comes amid ongoing financial struggles for C3.ai, which reported a first-quarter loss of $117 million and a 19% decline in revenue year-over-year. Siebel attributed the poor performance to internal disruptions following leadership changes and his own health issues. The company's shares have lost more than half their value this year.

Analysts have cut price targets and downgraded the stock after C3.ai withdrew its full-year revenue guidance and signaled ongoing operating challenges. With the company exploring a potential sale and leadership still adjusting under new CEO Stephen Ehikian, uncertainty remains high for investors. Siebel remains on the board as executive chairman.

How Markets Reacted

C3.ai shares fell 3.4% to $14.78 on Wednesday, trading below both its 50-day and 200-day moving averages. The stock, which hit a 12-month high of $45.08 in 2024, now trades near its 52-week low. Market participants remain cautious, with 7.4 million shares changing hands, well above its average daily volume.

The decline reflects broader skepticism about C3.ai's ability to regain traction in the competitive enterprise AI market. While the company reported strong customer satisfaction and key partnerships with cloud providers like Microsoft and Amazon, its recent results show a lack of execution and declining revenue. Siebel's decision to sell shares has raised further concerns.

What This Means for Investors

Siebel's sale, executed under a prearranged trading plan, may signal a lack of confidence in the company's near-term prospects. However, the company's recent partnership-driven growth, particularly in defense and government sectors, could still offer long-term opportunities. C3.ai also holds $711.9 million in cash, providing some breathing room as it works through restructuring costs and leadership transitions as reported by analysts.

Analysts remain divided, with four recommending a "Strong Sell" and three advocating a "Strong Buy." The average price target stands at $16.67, slightly above the current share price of $14.78. With C3.ai projecting continued losses through 2026, the focus for investors will be on whether the company can stabilize operations and deliver consistent revenue growth in the coming years as financial data shows.

Risks to the Outlook

C3.ai faces several near-term headwinds, including ongoing sales execution challenges and high operating costs. Its recent restructuring efforts led to fewer new client deployments and a sharp drop in demonstration license revenue. The company also faces increasing competition from larger AI players such as Palantir Technologies.

Meanwhile, the departure of founder Thomas Siebel and the ongoing search for a potential buyer have added layers of uncertainty. Siebel has disclosed a vision-impacting autoimmune condition, which further complicates the transition to new leadership. Until the company can prove it can execute on its strategic goals and grow revenue, skepticism is likely to persist.