C3.ai After a 55% Drop: Is Now the Time to Buy? Wall Street Weighs In

C3.ai's shares plunged roughly 55% in 2025, prompting a fresh round of debate among investors and analysts about the company's prospects. The sell-off reflects a convergence of near-term worries — softer-than-expected revenue and bookings, heightened competitive pressure in the enterprise AI market, and investor rotation away from high-multiple software names — alongside lingering questions about the pace of customer adoption and margin expansion.

Wall Street's reaction has been mixed. Some bullish analysts emphasize C3.ai's positioning in a large and growing AI market, its recurring revenue model, and strategic partnerships that could drive multi-year upside if enterprise adoption accelerates. These proponents argue the share-price decline compresses valuation enough to offer a compelling entry point for long-term investors who believe in the structural shift to AI-driven operations.

Conversely, cautious voices highlight execution risk. They point to customer concentration, a history of volatile quarterly results, and intensifying competition from major cloud and AI vendors that have deeper pockets and broader ecosystems. For these skeptics, the current plunge may reflect legitimate skepticism about hitting near-term targets and sustaining durable margin improvements.

What should investors consider? First, assess the fundamentals: trailing revenue growth, annual recurring revenue (ARR) trends, customer retention and expansion, plus guidance credibility. Second, watch catalysts that could change the story: a clear improvement in bookings, meaningful margin leverage, new large enterprise wins, or evidence of lower churn. Third, valuation matters — a cheaper price can justify higher risk, but only if fundamental progress resumes.

Risk tolerance and time horizon are key. Traders may view the drop as a short-term trading opportunity, while long-term investors should require confidence in execution and market position before committing sizable capital. Given the polarized views on Wall Street, many investors opt for a measured approach: position sizing, trailing entries, or waiting for confirming evidence of recovery.

Bottom line: the 55% decline raises the risk/reward debate — an attractive discount to some, a warning sign to others. Investors should weigh company fundamentals, competitive dynamics, and their own risk appetite before deciding whether to buy, hold or pass.