(Bloomberg) -- C3.ai Inc. plunged 20% in extended trading after providing a fiscal-year revenue outlook that fell short of analysts’ estimates, fueling concerns the artificial intelligence software company is not living up to the investor enthusiasm that has seen its stock price more than triple this year.

Sales will increase 11% to 20% to a midpoint of $307.5 million in the fiscal year ending April 2024, the Redwood City, California-based company said Wednesday in a statement. Analysts, on average, estimated $317 million, according to data compiled by Bloomberg. The company projected an adjusted loss of $50 million to $75 million in the fiscal year, which is in line with estimates.

Shares dropped to a low of $31.10 in extended trading after closing at $40.01 in New York. As investors have developed an insatiable appetite for AI, the company’s stock has leaped 258% this year, making it the best-performing stock in the S&P North American Expanded Technology Software Index. C3.ai has jumped 45% just since Nvidia Corp.’s blockbuster earnings last week, which boosted a basket of AI-related stocks.

Still, many are betting against the company. Short interest amounted to about 29% of shares available to the public as of May 24, according to data from S3 Partners. Activist investors have accused the company of chasing trends and employing poor accounting practices. Former employees said C3.ai has routinely overstated the readiness of its technology in the past, although founder and Chief Executive Officer Tom Siebel has defended his company’s products and practices. 

“The C3 AI Platform is increasingly recognized as the gold-standard in enterprise AI,” Siebel said in the statement. “We have over 40 production enterprise AI applications that offer the market rapid time to value.”

Much of the investor interest is based on C3.ai’s new generative artificial intelligence “product suite” it debuted in March. The company said it closed AI application agreements with Georgia-Pacific, Flint Hills Resources, and the U.S. Department of Defense Missile Defense Agency in the quarter. It previously announced it had three customers when it released preliminary quarterly results earlier this month. 

Read more: C3.ai Criticized for Product Delays, Tom Siebel’s Micromanaging

“We’re a little bit shocked by the response that we had to C3 generative AI,” Siebel said during a conference call after the results were released. The company’s products and relationships should help it capitalize on the new AI interest, Gil Luria, an analyst at D.A. Davidson, wrote in a note.

Not all analysts are convinced the new technology will be ground-breaking for C3.ai.

“The results confirm C3.ai likely has a very small revenue exposure to generative AI or large language models,” Bloomberg Intelligence’s Mandeep Singh said of the three pilot projects with limited revenue. “C3 is still heavily focused on the energy vertical and I don’t see it expanding across industries given the competition from hyperscale cloud vendors and other large application software providers.”

C3.ai has struggled to sign new major customers, and recently shifted to consumption pricing — paying for software based on use rather than in a flat subscription — to court companies that are hesitant to commit to big contracts. The company said it inked 43 agreements in the quarter, including 19 pilots and touted that the average sales cycle shorten to 3.7 months from 5 months in the same period a year ago. 

Chief Financial Officer Juho Parkkinen said the company continues to expect to be profitable on an adjusted basis by the fourth quarter of 2024. He added that C3.ai expects to “invest aggressively to generative AI initiatives during the first half of the year.”

(Updates with comments from executives beginning in the sixth paragraph.)

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