KeyBanc Raises C3.ai (AI) Price Target, Keeps Underweight Rating

On Thursday, May 29, KeyBanc Capital Markets raised the price target for C3.ai, Inc. (NYSE:AI) from $17 to $18 and kept an “Underweight” rating. This decision follows the company’s results for the fourth fiscal quarter, which showed a mixed performance with total revenue slightly exceeding expectations. This was mainly because Services revenue increased, which helped offset lower Subscription revenue.

KeyBanc Raises C3.ai (AI) Price Target, Keeps Underweight Rating

A computer engineer debugging a complex AI application on a powerful workstation.

KeyBanc noted that the growth in subscription revenue was driven by a big jump in demo licenses, which tripled. However, when these demo licenses were taken out, subscription revenue actually declined a little over 20% compared to the previous year. For fiscal year 2026, C3.ai, Inc. (NYSE:AI) guidance projects revenue to grow by 15-20% year-over-year, which aligns with market estimates. C3.ai, Inc. (NYSE:AI) explained that this wide range in its guidance is because of possible economic risks.

The company’s guidance for fiscal year 2026 also includes margin forecasts that are about two percentage points higher than the midpoint of market projections. Additionally, the management now expects to achieve EBIT profitability in the second half of fiscal year 2027 and to be free cash flow positive in Q4 of fiscal year 2026. Despite that, KeyBanc expects C3.ai, Inc.’s (NYSE:AI) revenue for the fiscal year 2026 to be two points lower than the guidance midpoint, mainly because of a slowdown in subscription revenue, excluding demo licenses. KeyBanc also expects the company to keep reporting losses in EBIT and free cash flow through fiscal year 2027.

C3.ai, Inc. (NYSE:AI) is an enterprise AI application software company that offers a broad range of fully integrated products to build and operate enterprise-scale AI applications and accelerate digital transformation.

While we acknowledge the potential of AI as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than AI and that has’ a 100x upside potential, check out our report about the cheapest AI stock.

READ NEXT: 11 Stocks That Will Bounce Back According To Analysts and 11 Best Stocks Under $15 to Buy According to Hedge Funds.

Disclosure: None.