BofA Stays Bearish on C3.ai (AI), Sees Limited Upside Amid Rising AI Competition

Core Viewpoint - C3.ai, Inc. is facing significant challenges in maintaining competitive differentiation in a crowded AI applications market, leading to a lowered price target and an "Underperform" rating from BofA Securities [1][2][3]. Group 1: Analyst Ratings and Price Target - BofA Securities analyst Brad Sills has reduced the price target for C3.ai from $14.00 to $10.00, citing weak growth visibility and limited upside potential [1][4]. - The new price target is based on a valuation of 2.7x EV/FY26E revenue, which is a discount compared to peers valued at 5.7x [4]. Group 2: Competitive Landscape and Growth Concerns - The AI applications market is becoming increasingly competitive, which is impacting C3.ai's ability to sustain its differentiation [2]. - BofA expresses concerns that C3.ai's revenue growth and free cash flow may remain negative for several more years, which could hinder its performance relative to infrastructure software peers [3]. Group 3: Investment Perspective - While there is potential in AI as an investment sector, BofA believes that other AI stocks may offer better upside potential and lower downside risk compared to C3.ai [5].