New York, February 5, 2026, 13:40 (EST) — Regular session
- C3.ai shares dropped roughly 7% in afternoon trading, underperforming other AI-related stocks
- A filing reveals Executive Chairman Thomas Siebel offloaded shares at a weighted-average price of $10.81
- Investors are eyeing if the software selloff eases and what C3.ai reveals at its March conference
Shares of C3.ai (NYSE: AI) slipped 7.0% to $10.33 by mid-afternoon Thursday, touching a low of $10.29 earlier in the session. Palantir dropped 5.6%, while Nvidia showed minimal movement.
U.S. software and data-services shares dropped for a seventh day, dragged down by fears that rapidly evolving AI tools could disrupt the sector’s economics. The S&P 500 software and services index fell 2.8%, wiping out more than $950 billion in market value since January 28, according to Reuters. Short interest — or bets against stocks — has been climbing. Meanwhile, Alphabet’s announcement of plans to nearly double its capital spending rattled investors concerned about returns on the AI push. “The uncertainty around the eventual impact of AI means near-term earnings results will be important signals of business resilience,” said Ben Snider, Goldman Sachs’ chief U.S. equity strategist. (Reuters)
Wednesday closed with losses after Advanced Micro Devices took a hit on its revenue forecast and Palantir plunged nearly 12%, wiping out the previous day’s gains. Investors are starting to question whether the AI rally got ahead of itself. “The market is suddenly skeptical and concerned about it,” said Jed Ellerbroek, portfolio manager at Argent Capital. Josh Chastant of GuideStone Funds added, “If you’ve got legacy software that’s old and clunky, you’re a ripe target for AI.” (Reuters)
A regulatory filing revealed that Executive Chairman Thomas Siebel sold 27,605 shares of C3.ai on Feb. 2, at an average price of $10.81. According to the Form 4, the company withheld and sold shares automatically to cover tax obligations from vesting restricted stock units. The filing also noted the sale was made under a Rule 10b5-1 trading plan, which is a prearranged program. After the transaction, Siebel still held 747,882 shares. (SEC)
Insider-sale disclosures often unsettle thinly traded stocks, even if the sales stem from tax obligations rather than a planned departure. With software shares under pressure, it takes little to move the needle on small-cap names.
C3.ai develops enterprise AI software and related services, targeting large corporations and U.S. federal agencies. In its latest quarterly earnings, the company reported $75.1 million in revenue for the fiscal second quarter ended Oct. 31, with a GAAP loss of 75 cents per share. CEO Stephen Ehikian highlighted the federal sector as a major growth driver, saying, “The Federal market continues to be a large growth vector for us.” (C3 AI)
At the moment, AI behaves more like a sentiment gauge for software than a standalone story stock, tracking the broader market and risk appetite. Investors are focusing on macro headlines, big-tech budgets, and how the sector selloff unfolds.
The risk is straightforward: should the software sell-off intensify, C3.ai could slide further even without new developments from the company. A short squeeze—where shorts scramble to cover—might push the stock higher if the sector steadies, though traders note that typically calls for quieter conditions and clearer triggers.
Investors are eyeing C3.ai’s C3 Transform 2026 conference set for March 3–5 in Boca Raton, Florida. CEO Stephen Ehikian is slated to speak, with the company also set to showcase customer use cases. Note that the preferred hotel rate deadline is February 6. (C3 AI)
Traders will be watching to see if AI holds above $10 as the session winds down, while also gauging if the wider software sell-off begins to slow over the coming days.
