C3.ai Scraps Fiscal Q2 Operating Expectations

Analysts and options traders are weighing in on the results

Deputy Editor
Sep 7, 2023 at 10:43 AM
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Shares of artificial intelligence (AI) software specialist C3.ai Inc (NYSE:AI) are plunging this morning, last seen down 15.6% at $26.58, after the company forecasted a larger-than-expected operating loss for the fiscal second quarter.

In its fiscal first-quarter report, C3.ai, said it sees fiscal second-quarter operating losses coming in between $27 million and $40 million, while analysts anticipated a loss of $20.5 million. For the fiscal first quarter, the company turned in losses of 9 cents per share on revenue of $72.4 million, both of which beat Wall Street's estimates.

Bearish traders are heeding the warning, too, with 90,000 puts traded already today. Meanwhile, 72,000 calls have also crossed the tape, for total options volume that is six times the average intraday amount. New positions are being sold-to-open at the most popular positions, the weekly 9/8 26-strike put.

Analysts are weighing in as well, with JPMorgan Securities raising its price target to $17 from $15, while Wedbush adjusted lower to $42 from $50. Both now stand outside of the 12-month consensus target price of $27.10 -- a 1.9% premium to AI's current perch. Added to the short sale restricted (SSR) list this morning, C3.ai stock's 32.97 million shares sold short represent 33% of its total available float. 

AI today is trading below $28, which served as a floor on the charts during its August pullback. Similarly, its 160-day moving average just moved in as pressure, after serving as a safety net last month. Year to date, C3.ai stock maintains a 136.3% lead.


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