By Maksym Misichenko · Nasdaq ·
What AI agents think about this news
The panel is largely bearish on C3.ai and BigBear.ai due to significant revenue declines, high cash burn rates, and vulnerability to a tighter capital environment. The key risk is the sustainability of their business models, while the key opportunity lies in potential improvements in ARR growth, gross margins, and cash flow.
Risk: Sustainability of business models
Opportunity: Improvements in ARR growth, gross margins, and cash flow
This analysis is generated by the StockScreener pipeline — four leading LLMs (Claude, GPT, Gemini, Grok) receive identical prompts with built-in anti-hallucination guards. Read methodology →
C3.ai (NYSE:AI) primarily generates revenue by providing enterprise software that helps organizations develop and operate large-scale data applications using artificial intelligence. It recently expanded a collaboration with Shell and recorded a net income margin of negative 224% for the quarter ended April 30, 2026.
BigBear.ai (NYSE:BBAI) earns revenue by providing technology consulting and data analysis services using AI for predictive modeling and decision support. While facing a securities fraud investigation from a law firm, it gained national security approval in the Netherlands to use its platform for airport security screening. It reported an EBIT margin of negative 67% for the quarter ended March 31, 2026.
Tracking revenue helps investors measure a company's ability to generate baseline sales before accounting for expenses. This metric reveals whether an organization is successfully attracting customers and growing its overall business volume over time.
| Quarter (Period End) | C3.ai Revenue | BigBear.ai Revenue | |---|---|---| | Q3 2024 | $87.2 million (period ended July 2024) | $41.5 million (period ended Sept. 2024) | | Q4 2024 | $94.3 million (period ended Oct. 2024) | $43.8 million (period ended Dec. 2024) | | Q1 2025 | $98.8 million (period ended Jan. 2025) | $34.8 million (period ended March 2025) | | Q2 2025 | $108.7 million (period ended April 2025) | $32.5 million (period ended June 2025) | | Q3 2025 | $70.3 million (period ended July 2025) | $33.1 million (period ended Sept. 2025) | | Q4 2025 | $75.1 million (period ended Oct. 2025) | $27.3 million (period ended Dec. 2025) | | Q1 2026 | $53.3 million (period ended Jan. 2026) | $34.4 million (period ended March 2026) | | Q2 2026 | $51.6 million (period ended April 2026) | Not yet reported |
Data source: Company filings. Data as of July 10, 2026.
For investors interested in exposure to the hot artificial intelligence sector, C3.ai and BigBear.ai are two stocks to consider. Both produce significant sales from the U.S. government. Examining their revenue trends is a fundamental starting point to seeing how well their respective AI solutions are gaining customer traction.
As these trends reveal, both businesses are experiencing year-over-year sales declines in recent quarters. The reason behind this is different for each. BigBear.ai saw 2025 revenue drop to $127.7 million compared to $158.2 million in 2024 as a result of the Trump Administration’s budget cuts last year.
The company may be turning a corner in 2026. BigBear.ai’s first-quarter revenue of $34.4 million was only a 1% year-over-year drop. It forecasted full-year 2026 revenue between $135 million and $165 million, indicating it expects to improve from last year’s dismal sales.
C3.ai saw revenue fall after its CEO, Tom Siebel, had to step down due to health reasons. The company announced his return to the position when it reported results for its fiscal fourth quarter ended April 30.
C3.ai did well under Siebel, as illustrated by its quarterly revenue growth trend between Q3 of 2024 to Q2 of 2025. Now that he is back running the company, the question remains whether sales will return to this previous performance. Investors may have to wait a few quarters to see if Siebel can turn the business around.
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Robert Izquierdo has positions in C3.ai. The Motley Fool recommends C3.ai. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
Four leading AI models discuss this article
"The massive revenue contraction at C3.ai combined with unsustainable negative net margins suggests a fundamental failure to achieve product-market fit at scale."
The revenue trajectory for both C3.ai and BigBear.ai is alarming, suggesting these companies are struggling to convert 'AI hype' into sustainable enterprise scale. C3.ai’s revenue collapse from $108.7M in Q2 2025 to $51.6M in Q2 2026 is a fundamental red flag, regardless of CEO Tom Siebel’s return. A -224% net margin indicates a business model that is effectively burning cash to buy revenue that isn't sticking. While BigBear.ai appears 'steadier,' that stability is relative to a much smaller base and plagued by legal overhangs. Both companies are essentially high-beta plays on government spending rather than true SaaS growth stories, and their current cash-burn rates make them highly vulnerable to a tighter capital environment.
If C3.ai’s recent leadership transition and renewed Shell collaboration signal a pivot back to high-margin enterprise deployments, the current revenue trough could represent an extreme valuation floor for a speculative turnaround play.
"C3.ai's 52% YoY revenue collapse cannot be explained by a CEO absence alone and signals either structural demand destruction or customer defection that Siebel's return may not reverse."
C3.ai's 52% revenue collapse from Q2 2025 ($108.7M) to Q2 2026 ($51.6M) is catastrophic, not a CEO-transition blip. The article attributes it to Tom Siebel's health absence, but that's narrative convenience—a 9-month revenue halving suggests either customer churn, contract cancellations, or a fundamental business model failure. BigBear.ai's stabilization at ~$33M quarterly revenue (vs. C3.ai's freefall) and its Shell partnership expansion are positives, but both companies remain deeply unprofitable (C3.ai: -224% net margin; BigBear.ai: -67% EBIT margin). The article's 'turning corner' framing for BigBear.ai rests entirely on guidance—unverified forward claims carry zero weight given both firms' track records.
Siebel's return could genuinely unlock customer confidence and contract closures that are already in the pipeline but not yet recognized as revenue; enterprise AI deals have long sales cycles, so Q3-Q4 2026 could show dramatic reversal.
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"Near-term downside risk for C3.ai and BigBear.ai absent a clear turnaround in ARR growth and margins."
While the headline highlights revenue declines, the deeper issue is contract quality and margin trajectory rather than a simple demand slump. C3.ai’s larger footprint and Shell collaboration could emerge as meaningful growth if enterprise AI adoption accelerates and renewals stabilize, turning a quarterly dip into a longer-term re-rating. BigBear.ai’s apparent stability is fragile if government budgets shift or if security approvals don’t translate into durable deals. Both names remain exposed to the timing of large wins and policy cycles, so near-term downside risk persists unless ARR growth, gross margins, and cash flow show tangible improvement.
The revenue softness may be structural rather than cyclical, implying a longer-term downside. BigBear.ai’s regulatory and legal risks could derail any stabilization before it proves cash flow resilience.
"The revenue collapse is likely a symptom of key-person dependency rather than a permanent loss of enterprise market share."
Claude, you dismiss the 'CEO health' narrative too easily. In enterprise AI, sales are driven by high-touch, executive-level relationships, not just product-market fit. If the primary rainmaker is sidelined, a 50% revenue drop isn't just possible—it's expected. The real risk isn't just business model failure; it's 'key person risk' masquerading as a structural decline. If Siebel’s return doesn't catalyze immediate contract closures, then—and only then—can we confirm the business model is fundamentally broken.
"Key person risk explains sales friction, not a 9-month revenue halving without corresponding pipeline evidence."
Gemini's 'key person risk' framing is seductive but incomplete. If Siebel's absence alone caused a 52% revenue cliff, we'd expect visibility into pipeline recovery or at least stabilized bookings post-return. Neither the article nor typical enterprise AI sales cycles support instant revenue recognition. The real test: does Q3 2026 show ARR inflection or just margin recovery? Without that, we're attributing a structural problem to a personality.
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"Durable ARR/margin improvement is necessary, not a narrative of a single CEO absence; the 52% drop could reflect renewal timing and contract quality, and without visibility into ARR, gross margins, and cash flow, the stock remains high-beta."
Claude, your 'catastrophic' framing ignores the nuance of enterprise sales cycles. A 9–12 month renewal window with a handful of mega deals can drive a 50% quarter-to-quarter swing without implying a structural collapse. The real issue is contract quality, churn risk, and whether Shell/enterprise wins translate into durable ARR, gross margins, and cash flow. Until those metrics show consistent improvement, the stock remains high-beta and vulnerable to policy shifts.
The panel is largely bearish on C3.ai and BigBear.ai due to significant revenue declines, high cash burn rates, and vulnerability to a tighter capital environment. The key risk is the sustainability of their business models, while the key opportunity lies in potential improvements in ARR growth, gross margins, and cash flow.
Improvements in ARR growth, gross margins, and cash flow
Sustainability of business models