C3.ai shares slip as enterprise AI group says profit will be delayed

Investing.com -- Shares in C3.ai (NYSE:AI) slumped in premarket U.S. trading on Thursday after the artificial intelligence start-up said its path to profitability will be delayed, fueling concern over its ability to take advantage of a surge in excitement over AI.

California-based C3.ai, which specializes in combining AI's human-like behavior with software designed for organizations, said that while it expects to be cash positive in the fourth quarter of its 2024 fiscal year, it does not expect to post a profit during the period.

Over the full year, the company guided for a non-GAAP loss from operations of between $70 million to $100 million on total revenue of $295 million to $320 million. 

The outlook comes as the group reported sales of $72.4 million in its fiscal first quarter, slightly beating Bloomberg consensus estimates of $71.6 million. The loss per share in the three months ended on July 31 came in at $0.09, narrowing from $0.12 in the corresponding period last year and also better than forecast.

Gross margins, meanwhile, are seen remaining under pressure as the firm increases its investments into the business, analysts at D.A. Davidson said in a note to clients.

"We continue to believe C3.ai is on track for [a second half] acceleration but with less margin upside and shares still crediting C3.ai with higher demand, we are staying on the sidelines," the D.A. Davidson analysts said.