To The Moon

At the beginning of January 2025, Motley Fool writer Adam Spatacco, posted a straightforward question:

Could AI software vendor $C3.ai, Inc.(AI)$ emerge as the $Palantir Technologies Inc.(PLTR)$ of 2025?

Fast-forward to 04 Sep 2025, US market has delivered a clear verdict. (see below)

As of 08 Sep 2025

• PLTR has surged +107.6% YTD (as of 08 Sep 2025).

• C3.ai in contrast, have plummeted by -54.6% YTD (as of 08 Sep 2025) and is hovering around a multi-year low.

In the end, answer to the January 2025 question is a decisive "No."

Just when sentiment around C3.ai seemed like it could not deteriorate further, the company delivered another round of unsettling news for shareholders.

Ultimately, it was C3.ai's weakness that became a significant win for PLTR investors.

C3.AI - Biz in Decline ?

Back in May 2025, C3.ai released its final set of results for its fiscal 2025 (that ended 30 Apr 2025).

It provided financial guidance for both Q1 2026 and FY 2026 as part of quarterly earnings release. (see below)

On Wed, 03 Sep 2025, when C3.ai reported its Q1 2026 earnings:

• Loss per share: was -$0.37 vs expected -%0.21 vs Q1 2025’s -$0.05; that’s a -640% YoY decline.

• Revenue: fell short of guidance range’s midpoint of $104.5 million by more than -30%.

• It was $70.26 million vs expected estimates of $93.84 million vs Q1 2025’s $87.21 million; that’s a -19.43% YoY decline.

• Operating income: was a loss of almost twice as bad as the pessimistic end of management's forecast.

• The -$57.8 million loss, that was -$24.3 million worse than planned and about +73% larger than expected.

• Compounding the disappointment, sales not only declined sequentially (QoQ), but were also lower than in the same period of the prior fiscal year.

Post Earnings announcement, C3.ai Management:

• Withdrew its prior full-year guidance.

• Did not provide a new / revised outlook.

This left investors without clear expectations about C3.ai's revenue or profitability:

• Heightening uncertainty around the company's outlook.

• Erodes management's credibility at a time when confidence was already fragile.

PLTR Comparatively Better ?

One frequent critique leveled against both Palantir and C3.ai is that they are overly dependent on a small number of clients.

To their credit, both companies have worked to expand their customer and revenue bases further.

For C3.ai:

• Sales mix has shifted meaningfully over the last few years.

• Back in March 2023, nearly 72% of its bookings came from companies in the oil & natural gas space.

• With another 16% tied to federal, aerospace, and defense customers.

• In recent times, it has begun to diversify into (a) manufacturing, (b) utilities, (c) chemicals, and (d) healthcare and they now represent growing portions of the portfolio.

• It continues to hold a notable presence in the public sector, with 32% of Q1 2026 bookings coming from state & local governments, as well as aerospace and defense.

For Palantir:

• It has undergone a similar evolution in its customer mix.

• Its main difference (from C3.ai) lies in the (1) scale and (2) strategic importance of its contracts.

• That started serving government agencies, has established a track record of securing high-profile contracts that affirm its standing as an indispensable partner across both public and private markets.

• Defense and government: In May, its Maven Smart System contract was expanded by $795 million, bringing the total value to $1.28 billion.

• The US Army has recently, consolidated 75 separate agreements with PLTR into a single contract worth up to $10 billion over the next decade.

• It has extended its reach to international alliances -- most notably, a deal with NATO.

• Commercial expansion: PLTR works with leading names in aviation such as Archer Aviation and American Airlines.

• Strategic partnerships: it has also cultivated an ecosystem of alliances with global technology and consulting leaders, including Oracle, Accenture, Amazon (AWS), Booz Allen Hamilton, PwC, Microsoft, KPMG, Databricks, and Deloitte.

These partnerships (a) expanded PLTR's distribution channels and (b) reinforced its position as a core layer within the enterprise AI software stack. 

In contrast, C3.ai‘s established partnerships and secured contracts tended to be (i) narrower in scope and (ii) carry less strategic weight.

Palantir’s ability to capture flagship opportunities, leave C3.ai winning smaller, less influential deals.

This dynamic positions Palantir as the default choice for high-stakes deployments, while C3.ai remains a secondary option.

PLTR - A Buy Now ?

Below is a benchmarked of PLTR against its two peers - C3.ai and $BigBear.ai Holdings(BBAI)$ .

All of them are competing for market share at the intersection of AI and public-private deployments. (see below)

PLTR's price-to-sales ratio (P/S) of 105.14 is elevated, even when viewed against the backdrop of prior market bubbles. (see above)

However, the disparity in valuation multiples between PLTR and its cohorts (C3.ai & BBAI) should not be misinterpreted.

C3.ai may look like a bargain (on the surface), but it is a classic value trap:

• Its business is in structural decline.

• It is steadily ceding ground to its larger rival.

With the stock turning into a falling knife, growth investors would be far better served to hold shares of an established leader like PLTR, that continues to solidify its long-term relevancy across government and commercial markets.

My viewpoints : (mine only)

Almost a year ago, on 12 Sep 2024 I had a post C3.ai or PLTR: which is Top AI stock to Buy ? (click to read).

It was an honest tear down of both stocks, charting their IPO journeys and critical analysis of their business models.

Back then C3.ai’s and PLTR stock prices were $21.12 and $30.16 respectively.

As of 08 Sep 2025 closing, their correspondingly stock prices were $15.74 and $156.10 respectively - what a difference a year made.

In my post’s parting remarks, I have written that “Future of these 2 AI stocks depend on their abilities to navigate the challenges ahead and deliver on their promises, without being affected by the state of US economy“.

From the look of things, it is evident who has navigated its way out of the maze and who is left behind, right.

Remember to check out my other posts. (See below). Help to Repost ok, Thanks.

Must Read: Click on below titles to access. Repost to share, Like as encouragement ok. Thanks.

• What's next after Jobs, Inflation & Q2 earnings? Mon, 15 September. Idea post.

• Will NVDA's bet on HON's quantum Pay Off ? Fri, 12 September. Pick post.

• AFRM vs KLAR, which is a better BNPL Buy ? Thu, 11 September. Pick post.

• Do you think with a new CEO Stephen Ehikian at the helm since 01 Sep 2025, C3.ai will be able to navigate its way out of the maze eventually?

• Do you think PLTR will be able to break through its 08 Aug 2025 peak of $186.96 ?

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