Shares of C3.ai Inc. (NYSE: C3AI) slumped as much as 20% in premarket trading on Thursday after the artificial intelligence software maker forecast revenue for the current quarter that fell short of analysts' expectations.
The company said it expects revenue of $79 million to $81 million for the second quarter, below the $84.7 million analysts were expecting. C3.ai also said it expects to lose $0.38 to $0.40 per share for the quarter, wider than the $0.32 loss analysts were expecting.
The disappointing forecast comes as C3.ai is facing increasing competition from other AI software companies, including Microsoft Corp. (NASDAQ: MSFT) and Amazon.com Inc. (NASDAQ: AMZN). C3.ai's software is used by businesses to automate tasks and make better decisions, but it has struggled to gain traction in the market.
The company's stock has fallen about 60% from its high of $150.00 in September 2020.
Analysis
C3.ai's disappointing forecast is a sign that the company is still struggling to gain traction in the market. The company's software is complex and expensive, and it is not clear that businesses are willing to pay for it.
C3.ai is facing increasing competition from other AI software companies, including Microsoft and Amazon. These companies have more resources and a wider reach than C3.ai, and they are likely to continue to eat into C3.ai's market share.
C3.ai will need to find a way to differentiate its software from the competition if it wants to succeed. The company may need to lower its prices or make its software easier to use. C3.ai may also need to focus on a specific market segment, such as healthcare or manufacturing.
If C3.ai can't find a way to differentiate its software, it is likely to continue to struggle. The company's stock is likely to remain under pressure until it can show that it is capable of generating sustainable revenue growth.
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