C3.ai Sees Rush to $20 Puts as Stock Tumbles 11% After Quarterly Results

The stock fell as much as 18% to $18.85 on Thursday, the lowest intraday price since early May 2023. The slide came after the company reported a 20% increase in subscription revenue growth to $87.2 million for the quarter that ended July 31. Analysts, on average, expected $79.1 million, according to estimates compiled by Bloomberg. Growth slowed from 41% in the previous three months.

"Deceleration in C3.ai's subscription revenue growth raises questions around its AI-applications and consumption-driven business ramp," Sunil Rajgopal, a senior analyst at Bloomberg Intelligence wrote in a note Wednesday. "With enterprise IT budgets under tight scrutiny, we remain cautious on C3.ai's growth rates."

While shares pared losses to 11% at $20.41 by 12:27 p.m. Thursday in New York, that hasn't damped demand for put options that give the holders the right to sell the stock at $20. Volume for that strike price reached 25,580 so far, the biggest among all put and call options across 12 expiration dates that stretch through Jan. 16, 2026.

Almost half of that volume are in contracts expiring next week. That volume so far is already more than 16 times the open interest, which now sits at 660 contracts.

C3.ai forecast revenue in the fiscal year 2025 to reach $370 to $395 million, while loss from operations is seen between $95 million to $125 million.

"We don’t think Q1 or the guidance does much to sway bearish investors with concerns regarding the core
profitability of the business," Canaccord Genuity analyst Kingsley Crane was quoted by Bloomberg as saying. "As it stands now, we may not get evidence to the contrary until at least" fiscal year 2026, he said.

The Canaccord analyst cut his price target on to $23, from $30. That's the second time he lowered it this year, according to Bloomberg data.

Still, technical indicators tracked by moomoo are flashing positive signals. Amid Thursday's sell-off, 11 of the 15 gauges, including the relative strength index, are showing the stock could now be oversold and the trend may be turning bullish.

Capital trend data compiled by moomoo showed inflows into the stock outpaced outflows by $33.54 million. That trimmed this month's net outflow to $6.95 million.

In the fiscal first quarter, the company said agreements closed jumped 122% to 71, including 52 pilots. It also said partner supported bookings expanded 94% from a year ago. While Morgan Stanley analyst Sanjit Singh cited that strong momentum, he said, "with substandard rev growth + op margins, we stick to UW,” referring to his underweight rating on the stock, according to a Bloomberg report.

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