C3.ai’s stock lost over 40% in a single day after revenue missed guidance by a wide margin and its CEO announced his resignation, triggering analyst downgrades and investor uncertainty.

At a Glance

• Preliminary Q1 2026 revenue came in 33% below company guidance
• Stock fell more than 40% in intraday trading on August 11
• CEO Thomas Siebel resigns due to health issues
• Multiple analysts cut ratings and price targets sharply
• Company retains $711 million in cash reserves despite losses

Earnings Miss and Market Shock

C3.ai released preliminary first-quarter 2026 results showing revenue of $70.2–$70.4 million, down about 19% from the same quarter a year earlier and roughly one-third below prior guidance of $104.5 million. The company also reported non-GAAP operating losses of $57.7–$59.9 million, nearly double earlier internal projections. GAAP operating losses reached approximately $124.8 million, marking a substantial increase over the prior year’s figure.

The announcement sparked a severe sell-off in the company’s shares. On August 11, the stock opened sharply lower, quickly falling more than 40% during intraday trading. Prices fluctuated between an early high of $17.60 and a low of $14.54 before settling near $16.61 by market close. Trading volume surged to over 54 million shares, far above daily averages, as investors reacted to both the financial shortfall and leadership changes.

Watch now: C3.ai Stock Plummets: CEO Siebel Announces Exit · YouTube

Leadership Transition and Strategic Uncertainty

Alongside its earnings announcement, C3.ai confirmed that founder and CEO Thomas Siebel would step down due to health concerns, including an autoimmune condition and vision impairment. Siebel attributed part of the revenue decline to disruptions from his reduced involvement and ongoing organizational adjustments.

The company completed a reorganization of its sales and service operations earlier in the quarter and has begun searching for a new chief executive. While Siebel will remain involved in an advisory capacity, the leadership transition adds uncertainty to the company’s strategic direction. The management team has reiterated plans to focus on strengthening recurring revenue streams and improving sales execution.

Analyst Reactions and Investor Sentiment

Analyst response to the news was swift. DA Davidson downgraded the stock to Underperform and lowered its price target to $13, calling the earnings miss “catastrophic.” Wedbush reduced its target to $23 but maintained an Outperform rating, citing the company’s technological capabilities despite operational concerns. UBS also cut its target to $23, warning about the company’s reliance on one-time revenue contracts.

Despite a reported $711 million in cash reserves, investor confidence has been shaken. The sharp drop in market value has raised questions about whether C3.ai can sustain growth in a competitive artificial intelligence sector, especially as rivals focus on expanding recurring revenues and demonstrating predictable performance. Market watchers note that the next scheduled earnings release on September 3 could prove pivotal in restoring—or further eroding—confidence.

Sources

Reuters
Bloomberg
Investors.com