Why Shares of C3.ai Slumped This Week
The artificial intelligence (AI) hype cycle may have finally crested. Shares of C3.ai (NYSE: AI) have fallen by as much as 12.1% this week, according to data provided by S&P Global Market Intelligence. On Wednesday, the enterprise AI provider reported weak growth and huge losses in its fiscal 2024 first quarter, prompting investors to sell the stock. Shares are off 40% from their peak, but are still up 150% year to date.
For the quarter, which ended July 31, C3.ai reported revenue of $72.3 million, up from $65.3 million a year prior. Some investors may take that as a good sign for the company's financial prospects. However, if you look further down the income statement, things look dire.
Gross profit for the fiscal quarter was $40.5 million, down from $46.9 million in the prior-year period. To achieve that decrease in gross profit generation, C3.ai spent $43.9 million on sales and marketing expenses -- a hefty outlay to see the business move backward. It's not a great sign for the continued adoption of the company's AI enterprise application solutions.
Source Fool.com
