C3.ai (NYSE:AI) stock fell on Monday as investment firm Wolfe Research downgraded the enterprise software company, citing concerns about spending.
Wolfe analyst Joshua Tilton lowered his rating on C3.ai to underperform from peer perform, while setting a per-share price target of $14, noting that there are “significant risks” to fiscal 2024 revenue growth, as spending budgets are likely to be impacted by a “negative macro outlook.”
Additionally, Tilton noted that companies are continuing to consolidate their spending on software, “which in our view, threatens the uptake of C3.ai’s newly introduced consumption model.”
Led by CEO Thomas Siebel, C3.ai shares have gained more than 80% year-to-date and were up more than 200% earlier this month.
Other artificial intelligence-linked stocks were mixed following Tilton’s C3.ai downgrade, as SoundHound AI traded higher, while BigBear.ai (NYSE:BBAI) slipped.
Earlier this month, C3.ai said claims that the gross margin from its Baker Hughes deal were 99% were “simply not true.”
C3.ai is just the third of a series of name changes done by the company. Before 2019 the company was called C3 IoT, a name adopted in 2016 to surf the Internet of Things wave, and before that, it was known as C3 Energy, as originally the company aimed to reduce corporate carbon footprints.
AI shares were pummeled $1.87, or 9.3%, to $18.19.