C3.ai to Report Earnings Today After a Turbulent Year

C3.ai, Inc. (NYSE: AI), the enterprise AI software firm, is set to report its second-quarter fiscal 2026 earnings after today's closing bell. The market is bracing for the results after a turbulent year marked by leadership changes, disappointing financial performance, and significant stock volatility.

As of the pre-market, C3ai's stock is trading 0.63% higher at $14.46; 6% higher on the week, but 16% lower over the past month. Since the start of 2025, the stock has fallen 58%, marking the name out as a huge underperformer against both peers, and broader markets. The key question now is whether C3ai can regain investor confidence after a series of setbacks.

The backdrop to this earnings release is complex, whilst recent history hasn't been kind to bulls. In August, C3.ai pre-announced preliminary Q1 fiscal 2026 results that sent shockwaves through the market. Expected revenues of $70.2 million to $70.4 million represented a staggering 19% year-over-year decline and fell well short of prior guidance. The projected GAAP operating loss of roughly $125 million further dampened investor sentiment. Former CEO Thomas Siebel, citing “completely unacceptable” sales results and attributing the underperformance to leadership transitions and personal health challenges, announced his resignation.

The market reacted swiftly and harshly. D.A. Davidson downgraded C3.ai's stock to Underperform, slashing the price target to $13. This downgrade amplified broader market anxieties concerning a potential AI sector bubble, leading to increased volatility across AI-related stocks.

However, C3.ai has taken steps to address these challenges. In September, Stephen Ehikian was appointed as the new CEO, with Siebel transitioning to the role of Executive Chairman. The company also granted Ehikian significant equity inducements, signaling a commitment to his leadership and long-term vision.

Analysts have labelled C3.ai a “Moderate Sell” and the average price target for $14.67. The lowest price target is as low as $8.00 and the highest target is $24.00, which is quite the range.

Now, all eyes are on the Q2 fiscal 2026 earnings report. Analysts are projecting an EPS of -$0.33, a sharp decline from the -$0.06 reported in the same quarter last year. Revenue is expected to be $75.14 million, down 20.35% year-over-year. Management's prior revenue outlook for the quarter was between $72 million and $80 million. The options market has indicated a bullish sentiment, suggesting expectations of a substantial price movement following the earnings announcement, but it remains to be seen if this optimism is justified.

Analyst Summary: Bull and Bear Cases

While the market expects a significant price movement post-earnings, the bigger question is what happens if C3.ai continues to disappoint. Can Ehikian turn the ship around, or is C3.ai facing a longer, more difficult road to recovery than many anticipate? We will not have to wait too long to find out if the shoots of a rally are growing strong roots.