C3.ai Shares Plunge 27.8% in February Amid Revenue Concerns and AI Sector Repricing

C3.ai (C3AI) experienced a sharp 27.8% decline in its share price during February 2026, erasing over $1.3 billion in market capitalization. The drop occurred despite broader gains in the technology sector, highlighting growing investor unease with the company’s recent performance and forward-looking signals. The sell-off intensified after C3AI reported fourth-quarter revenue of $142 million, slightly below the $145 million consensus estimate, while guidance for the first quarter of 2026 projected $147 million to $152 million—below expectations of $158 million. The company cited delays in large enterprise contracts and extended sales cycles as key factors behind the shortfall. Investors also reacted negatively to C3AI’s adjusted EBITDA loss of $28 million, widening from $22 million in the same period last year. The company’s cash burn rate remains elevated, with $187 million in cash and equivalents as of February 28, 2026, which analysts suggest may not be sufficient to sustain operations beyond 2027 without a significant shift in revenue growth. The decline affected broader AI software sentiment, with related stocks like Microsoft (MSFT) and NVIDIA (NVDA) seeing modest pullbacks despite strong earnings. Analysts noted that C3AI’s struggles underscore challenges in converting AI platform investments into predictable, scalable revenue—particularly among mid-sized enterprise clients. The sell-off also prompted a wave of downgrades, with three major firms revising their ratings to 'Underperform'.