Why Shares of C3.ai Stock Collapsed In 2025

The company is failing to grow during the AI boom and is burning a boatload of cash.Shares of C3.ai (AI +1.19%) fell 61% in 2025, according to data from S&P Global Market Intelligence. The artificial intelligence (AI) company builds custom software applications for large enterprises, and is struggling to compete with the likes of Palantir Technologies and other players in the space. In 2025, it lost its CEO, saw declining revenue, and rising operating losses. The stock is now down 92% from all-time highs. Here's why C3.ai fell yet again in 2025. ExpandNYSE: AIC3.aiToday's Change(1.19%) $0.17Current Price$13.99Key Data PointsMarket Cap$2.0BDay's Range$13.61 - $14.2452wk Range$12.59 - $35.98Volume182KAvg Vol6MGross Margin51.76% Lost CEO, declining sales Spending on AI software is growing like gangbusters. C3.ai is failing to benefit from this rising tailwind. Last quarter, its revenue declined 14% year-over-year to $71 million, with a hefty operating loss of $112 million. The company is spending a boatload of money on sales, marketing, and product development, but failing to win new customer contracts to drive sales higher. On top of terrible revenue figures, C3.ai founder and CEO Thomas Seibel was forced to retire due to a medical condition last year, adding further uncertainty to the company. Even though this business appears tailor-made for the AI revolution -- it even has 'AI' in its name -- there has been a failure to execute in the business applications field. Compare that to Palantir, which is growing revenue at a rapid clip with expanding profit margins at a much larger scale than C3.ai. It is clear what companies are winning the competition for AI enterprise tools, and it is not C3.ai. Advertisement Image source: Getty Images. Should you buy C3.ai stock? When C3.ai made its market debut in 2021, it had an absurdly high price-to-sales ratio (P/S) of 90. That has since fallen due to the company's long-term revenue growth (although that has reversed in 2025) and the price collapsing 90% from its highs. As of this writing, C3.ai stock has a P/S of 5.3. This may seem more palatable, but investors need to ask whether this company will ever turn a profit. Revenue is now moving in the wrong direction despite a massive industry tailwind, along with massive operating losses. Shares outstanding are up 46% since going public, which will be a shareholder dilution headwind for long-term stock price returns. AI is a highly sought-after category at the moment, but C3.ai falls short of living up to the hype. It is not surprising to see the stock down in 2025, and it should fall further in 2026. Read NextDec 15, 2025 •By Anthony Di PizioShould You Buy C3.ai Stock After Its 55% Drop in 2025? Here's What Wall Street Thinks.Dec 11, 2025 •By Harsh ChauhanIs C3.ai Stock a Buy Now?Dec 3, 2025 •By Justin PopeDon't Buy C3.ai Stock Until This 1 Thing HappensNov 25, 2025 •By Parkev Tatevosian, CFAShould You Buy C3.ai Stock Before the Huge Investor Update?Nov 19, 2025 •By Rick OrfordMassive News: Why Analysts Still See 167% Upside for C3.ai StockNov 7, 2025 •By David Jagielski, CPACan C3.ai Be a Good Contrarian Stock?About the AuthorBrett Schafer is a contributing Motley Fool stock market analyst covering consumer goods, financials, technology, and industrials. Brett is a self-taught investor and has hosted the Chit Chat Stocks podcast since 2018. He previously worked as a lab engineer for science laboratories. He holds a bachelor’s degree in mechanical engineering with minors in finance and mathematics from Washington State University. His lab work on Major League Baseball’s juiced ball problem was featured in The Wall Street Journal and other national outlets.TMFBrettSchaferX@CCM_BrettStocks MentionedC3.aiNYSE: AI$13.99 (+0.01%) $+0.17Palantir TechnologiesNASDAQ: PLTR$177.49 (+0.00%) $+0.63*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.Advertisement