Oppenheimer Downgrades C3.ai to Perform as Revenue Outlook Plunges 35% and CEO Departs

Oppenheimer downgrades C3.ai to Perform from Outperform after the AI software maker cuts Q1 revenue outlook by 35% and CEO Tom Siebel steps down. Analysts warn of potential long-term demand weakness.

Sharp Revenue Cut Triggers Downgrade

Oppenheimer has lowered its rating on C3.ai (NYSE:AI) to Perform from Outperform, removing its previous $45 price target.
The move follows the company’s drastic cut to its preliminary Q1 fiscal 2026 revenue forecast and the resignation of founder and CEO Tom Siebel.

Revenue Forecast Slashed by $35 Million

C3.ai now expects revenue of about $70 million for the quarter ended July 2025, down from its prior projection of $105 million.
This marks a 35% sequential decline, which Oppenheimer analysts called “a major concern” given the recurring nature of subscription revenues.

“The services are not working as advertised,” the brokerage noted, flagging the revenue miss as a potential sign of deeper structural issues.

Widening Losses and Leadership Change

• Non-GAAP operating loss is expected to widen to $58 million, compared to a previous forecast of $29 million.
• Founder and CEO Tom Siebel will step down due to health reasons.
• New leadership is in place following a completed restructuring.

Analysts Warn of Possible Secular Weakness

Oppenheimer expressed concern that these results could reflect long-term demand softness for C3.ai’s offerings.

The brokerage has:

• Cut its full-year revenue forecast by over one-third.
• Lowered 2027 expectations to align with the newly reduced 2026 outlook.

“The company is very difficult to forecast, but we are reducing estimates dramatically,” Oppenheimer stated.

Investor Takeaways

• Rating: Downgraded to Perform from Outperform.
• Target Price: $45 target removed.
• Key Risks: Weak subscription growth, widening losses, leadership transition.
• Watch For: Clarity on customer retention, subscription renewals, and stabilization of recurring revenues.