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Evaluating C3.ai (AI) After Its New U.S. Army Logistics Deal: Does The Valuation Still Look Stretched?

Simply Wall St · 2d ago

C3.ai (AI) just landed a meaningful endorsement from the U.S. Army’s Rapid Capabilities and Critical Technologies Office, which is adopting its AI platform to manage contested logistics and keep front line units supplied.

See our latest analysis for C3.ai.

Even with marquee wins like the Army and a new HHS data platform deal, C3.ai’s share price return has slid sharply this year, with the latest close at $15.82. Its three year total shareholder return is still positive, suggesting long term believers are counting on momentum to rebuild from here.

If this kind of government focused AI story interests you, it is worth comparing what is happening elsewhere in the sector through high growth tech and AI stocks to spot other potential winners.

With shares now below many prior AI hype peaks and revenue still shrinking, are investors looking at a mispriced leader in mission critical government AI, or a stock that already reflects all the growth it can reasonably deliver?

Most Popular Narrative Narrative: 8% Overvalued

Against a last close of $15.82, the most widely followed narrative pegs C3.ai’s fair value lower, implying investors are paying up for future execution.

The rapid expansion of AI deployments across manufacturing, chemicals, defense, and government clients, demonstrated by fresh enterprise-wide commitments from Nucor, Qemetica, HII, and U.S. Army projects, signals accelerating enterprise adoption of advanced AI platforms, which is expected to drive strong, multi-year revenue growth as adoption moves from pilots to broad production rollouts.

Read the complete narrative.

Curious why a company with shrinking revenues still attracts a premium valuation narrative? The answer blends ambitious growth forecasts, margin transformation, and a bold future earnings multiple. Want to see how those moving parts fit together, and what has to go right for this story to hold?

Result: Fair Value of $14.67 (OVERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent revenue contraction and ongoing partner dependence could quickly sour sentiment if execution stumbles again or if hyperscalers push harder with competing offerings.

Find out about the key risks to this C3.ai narrative.

Build Your Own C3.ai Narrative

If you are not convinced by this view, or would rather dive into the numbers yourself, you can build a personalized narrative in under three minutes: Do it your way.

A great starting point for your C3.ai research is our analysis highlighting 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.