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AI: U.S. Defense And Health Contracts Will Drive Long Term Upside

Microsoft AWS And Google Cloud Will Boost Global Enterprise AI

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AI
AnalystHighTarget
Not Invested
Published 04 Aug 2025

Update shared on 12 Dec 2025

Fair value Decreased 5.96%
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AnalystHighTarget's Fair Value
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1Y
-61.3%
7D
1.3%

Analysts have modestly lowered their price target on C3.ai from approximately 25 dollars to about 24 dollars, citing slower expected revenue growth and a higher required return. These more than offset slightly improved long term profitability assumptions and richer future valuation multiples.

What's in the News

  • The U.S. Army RCCTO selected C3 AI to deploy AI driven logistics for contested environments, integrating C3 AI applications into Brigade Command and Control networks to improve forecasting for parts, fuel, and munitions and enhance combat readiness (client announcement).
  • C3 AI won a contract with the U.S. Department of Health and Human Services to build a unified, secure data foundation across NIH and CMS, using the C3 Agentic AI Platform to improve data quality, analytics, and automation of administrative workflows (client announcement).
  • The company issued fiscal 2026 guidance, targeting third quarter revenue of 72.0 million to 80.0 million dollars and full year revenue of 289.5 million to 309.5 million dollars (corporate guidance).
  • C3 AI expanded integrations with Microsoft Copilot, Microsoft Fabric, and Azure AI Foundry, allowing customers to run C3 AI applications and domain agents through a single conversational interface and unify data and model operations on the Microsoft Cloud (client announcement).

Valuation Changes

  • Fair Value Estimate was reduced slightly from about 25.00 dollars to approximately 23.51 dollars, reflecting a modestly lower intrinsic valuation.
  • The Discount Rate rose slightly from about 8.47 percent to roughly 8.54 percent, indicating a marginally higher required return.
  • Revenue Growth fell significantly from an estimated 21.67 percent to about 6.65 percent, signaling a more cautious outlook on top line expansion.
  • The Net Profit Margin edged down slightly from roughly 12.66 percent to about 12.41 percent, implying only minor changes to long term profitability assumptions.
  • Future P/E increased markedly from about 62.4 times to roughly 97.3 times, suggesting a richer multiple applied to projected earnings.

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Disclaimer

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