C3.ai Downgraded to Sell on Weakened Fundamentals, Guidance Cuts, and Heightened Execution Risk

In a report released today, Koji Ikeda from Bank of America Securities reiterated a Sell rating on C3ai, with a price target of $8.00.

Koji Ikeda has given his Sell rating due to a combination of factors tied to C3.ai’s weakening fundamentals and elevated execution risk. The company’s latest quarterly revenue fell far short of his and the Street’s expectations, and management sharply cut its fiscal 2026 sales outlook, marking a second major guidance reset within half a year and signaling a business still struggling to stabilize.

Ikeda also views the large-scale restructuring and 26% workforce reduction as increasing operational risk, potentially hurting sales pipeline generation, product innovation speed, and employee morale at a time when revenue is already set to contract by roughly a quarter this year. While he acknowledges that cost cuts should move the firm closer to profitability over the next few years, he believes the uncertain durability of future growth, combined with these near-term headwinds, justifies a lower price objective and an Underperform (Sell) stance on the stock.

Ikeda covers the Technology sector, focusing on stocks such as Datadog, Snowflake, and Atlassian. According to TipRanks, Ikeda has an average return of 8.2% and a 51.56% success rate on recommended stocks.

In another report released today, Morgan Stanley also maintained a Sell rating on the stock with a $6.00 price target.