Should You Buy, Hold or Sell C3.ai Stock Ahead of Q2 Earnings?

C3.ai AI is scheduled to report its second-quarter fiscal 2025 results on Dec. 9.AI expects revenues between $88.6 million and $93.6 million for the fiscal second quarter. The Zacks Consensus Estimate for revenues is pegged at $91.01 billion, suggesting 24.28% growth from the figure reported in the year-ago quarter.The consensus mark for quarterly loss is pegged at 16 cents per share, unchanged in the past 30 days. AI reported a loss of 13 cents per share in the year-ago quarter.C3.ai’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with an average earnings surprise of 52.80%.Find the latest EPS estimates and surprises on Zacks Earnings Calendar.Advanced Micro Devices, Inc. Price and EPS Surprise Advanced Micro Devices, Inc. price-eps-surprise | Advanced Micro Devices, Inc. QuoteLet us see how things have shaped up for AI shares prior to this announcement.Factors to Note for AIC3.ai’s fiscal second-quarter performance is likely to have gained from the strong adoption of C3 Generative AI solutions and increased demand for its Enterprise AI software.C3.ai’s efforts to diversify its customer base and engage with clients across various industries, such as manufacturing, agriculture, construction, automotive and pharmaceuticals, are expected to have contributed significantly to revenue growth.In the first quarter of fiscal 2025, C3.ai secured 71 agreements (including 52 pilots), marking a 122% year-over-year increase. Partner-supported bookings also surged 94% year over year. This momentum is expected to have continued in the fiscal second quarter.In the first quarter of fiscal 2025, Alphabet’s GOOGL Google Cloud and C3.ai closed 40 agreements, representing a 300% year-over-year increase, driven by a joint campaign promoting the C3 AI State and Local Government Suite of applications. This has led to higher adoption, with C3.ai securing 24 agreements in the sector in the first quarter.C3.ai’s federal business is anticipated to have sustained its strength, driving top-line growth in the to-be-reported quarter. In the first quarter of fiscal 2025, AI entered into new and expanded agreements with key entities, including the U.S. Air Force, Navy, Marine Corps and Intelligence Community, further solidifying its leadership in the government sector.The U.S. Marine Corps is leveraging the C3 AI Defense & Intelligence Suite to modernize legacy systems and enhance operational efficiency. This collaboration is a part of USMC’s Manpower IT Systems Modernization Program and supports its goal of becoming a more agile and tech-driven force.AI Shares Outperform SectorYear to date, shares of AI have gained 30.9%, outperforming the broader Zacks Computer & Technology sector’s return of 32.4% and the Zacks IT Services industry’s appreciation of 19.4%.Year-to-Date Performance ChartImage Source: Zacks Investment ResearchHowever, AI stock is not so cheap, as suggested by the Value Score of F.C3.ai stock is currently trading at a premium with a forward 12-month Price/Sales (P/S) of 10.99X compared with the sector’s 6.33X.Price/Sales Ratio (F12M)Image Source: Zacks Investment ResearchAI stock is trading above its 50-day and 200-day moving average, indicating a bullish trend.AI Shares Trade Above 50-Day & 200-Day SMAImage Source: Zacks Investment ResearchC3.ai’s Prospects Ride on Strong PortfolioC3.ai’s expanding clientele and growing adoption of its Enterprise AI software are notable developments for investors.C3 Generative AI is being used by manufacturing, industrial and military industries. It improves safety standards on production floors and equipment operations and analyzes technical information, contracts and financial data.The strong portfolio is helping in the growing use of AI solutions. In first-quarter fiscal 2025, C3.ai closed 17 C3 Generative AI pilots with major firms like Eletrobras, Cargill, Dolce & Gabbana and Tractor Supply. Eletrobras, Latin America’s largest power company, has partnered with C3.ai to enhance grid resilience and availability.Beyond innovation and product capability, C3.ai has leveraged strong sales capabilities through strategic partnerships with tech giants like Booz Allen Hamilton, Microsoft MSFT, Amazon AMZN and Alphabet.ConclusionC3.ai’s expanding customer base, strong portfolio of AI solutions and strategic partnerships position it well for sustained growth. With increasing adoption across industries and robust momentum in the federal sector, C3.ai is poised to benefit significantly in the near term.C3.ai currently has a Zacks Rank #2 (Buy) and a Growth Score of A, a favorable combination that offers a strong investment opportunity, per the Zacks Proprietary methodology. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Amazon.com, Inc. 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