Redwood City, CA — C3.ai, the enterprise artificial intelligence software firm, saw its stock plunge this week following a major executive transition and a sobering earnings report that fell far short of expectations.
What Happened?
C3.ai announced that founder and CEO Thomas Siebel has stepped down due to health issues and has been replaced by Stephen Ehikian, the former Acting Administrator of the U.S. General Services Administration (GSA) and a veteran in AI and enterprise software. Siebel, who relinquished the CEO role on September 1, will remain as Executive Chairman.
At the same time, the company revealed its fiscal first-quarter results—reporting an adjusted loss of $0.37 per share, more than double analyst expectations, and a 19% year-over-year revenue decline to $70.3 million.
C3.ai also withdrew its full-year guidance and issued a second-quarter revenue outlook of $72 million to $80 million, well below Wall Street projections of $99 million.
Investor Reaction and Market Impact
The announcement triggered a swift reaction in the market, with C3.ai’s stock plummeting over 4% during regular trading and falling as much as 13% in premarket trading. Earlier last week, preliminary results had already caused a sharp drop of more than 25%.
Wedbush analysts maintained an “outperform” rating but slashed their price target from $23 to $20, noting a loss of investor confidence and highlighting the uphill battle the company faces. Meanwhile, Oppenheimer flagged the possibility that even further downward revisions to guidance may be necessary.
What Caused the Collapse?
Siebel attributed the poor performance to a combination of disruptive leadership restructuring and his own unexpectedly limited involvement in sales due to health issues. He admitted that his personal participation in customer engagements was more significant than previously recognized.
Ehikian, now the new CEO, brings experience from public service and enterprise AI, and expressed confidence in the company’s product and customer base. He emphasized plans to restore stability and accelerate enterprise and government adoption.
Summary Table
| Metric | Details |
|---|---|
| New CEO | Stephen Ehikian (former GSA Acting Administrator) |
| Outgoing CEO | Thomas Siebel (becomes Executive Chairman) |
| Q1 Financials | Loss: $0.37 EPS; Revenue: $70.3M (↓19% YoY) |
| Q2 Guidance | $72M–$80M (below estimates of ~$99M) |
| Full-Year Outlook | Withdrawn |
| Stock Movement | Down 4%+ intraday; fell up to 13% pre-market |
| Analyst View | Wedbush: “Outperform”, target cut to $20; Oppenheimer cautious |
C3.ai’s latest developments reflect a deep-seated crisis of execution, leadership, and investor confidence. Whether the appointment of Stephen Ehikian and forthcoming strategic changes can reverse the company’s market slide remains to be seen.