Is the C3.ai Stock a Buy Post Q2 Earnings and Microsoft Partnership?

C3.ai AI shares inched up 0.12% to close at $41.73 on Dec. 10, a muted response to its strong second-quarter fiscal 2025 results.Adjusted loss of 6 cents per share was much narrower than the Zacks Consensus Estimate of a loss of 16 cents. The company reported a non-GAAP loss of 13 cents per share in the year-ago quarter.Revenues of $94.34 million increased 29% year over year, beating the Zacks Consensus Estimate by 3.66%. The company witnessed strong traction in its enterprise AI applications, particularly for C3 Generative AI.An expanding partner base with the recently announced alliance with Microsoft MSFT is noteworthy. AI’s current partner ecosystem comprises the three big cloud providers — Amazon AMZN, Alphabet GOOGL and Microsoft.This has helped C3.ai shares appreciate 45.3% year to date, outperforming the Zacks Computer & Technology sector’s return of 32%.YTD PerformanceImage Source: Zacks Investment ResearchWill the momentum continue in 2025? Let’s find out.AI Shares Rides on Strong PortfolioC3.ai’s strong traction in enterprise AI applications, particularly for C3 Generative AI, has been noteworthy.In the fiscal second quarter of 2025, C3.ai closed 58 agreements, 36 of which involved pilot projects. This represents a notable increase in demand for its Enterprise AI and Generative AI offerings.C3.ai’s strong interest in its Generative AI solutions has been a key catalyst. The company closed 15 new generative AI agreements in the fiscal second quarter, which is a positive sign of growing demand for AI tools that can generate, automate, and optimize tasks across industries.C3.ai’s federal business also saw strong growth in the second quarter of fiscal 2025, securing new and expanded agreements with the U.S. Department of Defense, the U.S. Air Force, the U.S. Navy, the U.S. Army, the U.S. Marine Corps, the Defense Logistics Agency, the Chief Digital Artificial Intelligence Office, and the National Science Foundation.AI’s Strong Partner Base Boosts ProspectsPartnerships with hyperscalers like Google Cloud, Amazon Web Services (AWS), and Microsoft Azure have driven 62% of the company’s agreements in the second quarter of fiscal 2025. This indicates that C3.ai’s partner network is critical in driving revenues and adopting its solutions.In the fiscal second quarter, C3.ai, in collaboration with Alphabet’s cloud business Google Cloud, closed 20 agreements, marking a 180% year-over-year increase. It was featured at Google’s Public Sector Summit in Washington, DC, while jointly hosting six executive roundtable discussions across North America and LATAM.C3.ai is also benefiting from its expanding partnership with Microsoft. It leverages Microsoft’s Azure platform to enhance its AI offerings and reach a broader customer base across sectors.C3.ai closed 58 agreements in the fiscal second quarter, including 36 pilots and significant deals with organizations such as ExxonMobil, Coca-Cola, Dow, Shell, Duke Energy, Rolls-Royce, and Boston Scientific.AI Offers Solid Top-Line Growth GuidanceFor fiscal 2025, C3.ai expects revenues between $378 million and $398 million. The Zacks Consensus Estimate for fiscal 2025 revenues is pegged at $383.04 million, indicating 28% growth year over year. The consensus mark for loss is pegged at 53 cents per share, which has remained unchanged over the past 30 days.For third-quarter fiscal 2025, C3.ai expects revenues between $95.5 million and $100.5 million. The Zacks Consensus Estimate for third-quarter fiscal 2025 revenues is currently pegged at $98.08 million, indicating growth of 25.1% from the figure reported in the year-ago quarter.C3.ai, Inc. Price and Consensus C3.ai, Inc. price-consensus-chart | C3.ai, Inc. QuoteFind the latest EPS estimates and surprises on Zacks Earnings Calendar.What Should Investors Do With AI Stock?We point out that C3.ai stock is not so cheap, as the Value Score of F suggests a stretched valuation at this moment.However, C3.ai is benefiting from strong demand for C3 Generative AI solution and an expanding partner base.The technical indicator is also bullish for AI as the shares trade above the 50-day and 200-day moving averages, indicating robust upward momentum.AI Trades Above 50-Day & 200-Day SMAImage Source: Zacks Investment ResearchAI stock currently carries a Zacks Rank #2 (Buy) and has a Growth Score of A, a favorable combination that offers a strong investment opportunity, per the Zacks Proprietary methodology. 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