Chapter 1: What is the main topic discussed in this episode?
Welcome to Seeking Alpha's Wall Street Breakfast, where we cover the top news for investors every morning. It's good to be with you on the 26th of February. Today is Thursday. I'm Julie Morgan. C3.ai is down 23% in pre-market action after posting a quarterly earnings miss and forecast revenue below expectations.
The company also pointed to soft results in Europe and North America in addition to unveiling job cuts. The CEO outlined a comprehensive execution plan with five strategic initiatives. He announced a major restructuring, cutting $135 million in expenses, including $60 million from a 26% headcount reduction, and said workforce changes are largely complete.
In terms of guidance, C3AI projected total revenue of $48 to $52 million for Q4, well below the consensus estimates of $77.72 million. For the full year, total revenue is expected to reach $246.7 to $250.7 million, compared with the consensus forecast of $298.74 million.
The company, however, highlighted strong federal defense and aerospace bookings, noting federal bookings increased by 134% year-over-year and accounted for 55% of total bookings, with key customer wins including the U.S. Department of Agriculture, U.S. Department of Energy, NATO, Royal Navy, GSK, ExxonMobil, and U.S. Steel.
Chapter 2: Why did C3.ai's shares fall after their earnings report?
NVIDIA is up 1.3% pre-market, after reporting fiscal fourth quarter results and guidance that topped Wall Street's forecast by a wide margin. For the period ending January 25th, Nvidia said it earned an adjusted $1.62 per share, as revenue soared 73% year-over-year to come in at $68.13 billion. Analysts had expected the company to earn an adjusted $1.54 per share on $65.91 billion in revenue.
Looking ahead to the fiscal first quarter, NVIDIA expects revenue to be $78 billion, plus or minus 2%. The company also said it does not expect any revenue from China for the period. Analysts had expected the company to generate $72.78 billion in revenue. Chinese AI firm DeepSeek has not shown U.S. chipmakers its upcoming AI model for performance optimization.
This breaks away from standard industry practice ahead of a major model update. Reuters reported citing people with knowledge of the matter that DeepSeek, which is expected to unveil the new model called V4, granted early access to domestic suppliers including Huawei Technologies.
AI developers usually share pre-release versions of major models with leading chip makers like NVIDIA and advanced micro devices to ensure their software works efficiently on widely used hardware. NVIDIA, AMD, DeepSeq, and Huawei did not immediately respond to a request for comment from seeking alpha.
According to the CEO of research firm Creative Strategies, the move is likely part of a larger strategy by the Chinese government to try to keep U.S. hardware and models disadvantaged in China.
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Chapter 3: What strategic initiatives did C3.ai's CEO outline for recovery?
Of course, I have a few other articles that are trending on Seeking Alpha. The plaintiff in the social media addiction trial is set to take the stand after her therapist's testimony. The Trump administration is holding back $259 million in Medicaid payments to Minnesota. And odds in the Warner Brothers deal shifts to paramount as $14 million options bet signals Netflix upside if it loses.
I'm also including a link with an update to Salesforce earnings. Ticker symbol CRM is down 3.4% in pre-market action. On Wall Street at this early hour, Dow, S&P and Nasdaq futures are flat. Crude oil is down 1% at $64 a barrel. Bitcoin is up 0.8% at $68,000. Gold is up 0.4% at $51.87. The FTSE 100 is up 0.1% and the DAX is up 0.2%.
Nutanix is on our list of the biggest movers of the day pre-market. NTNX is up 20% despite guiding Q3 revenue and fiscal year 2026 revenue below consensus, following strong fiscal Q2 results with $723 million in revenue, which was up 10% year-over-year, beating estimates. And ARR up 16% to $2.36 billion. The rallies stem from a multi-year strategic partnership with AMD.
And on today's economic calendar, at 8.30 a.m., jobless claims. And at 10 a.m., the Fed's Michelle Bowman will testify before a Senate Banking, Housing, and Urban Affairs hearings. That's it for today's Wall Street Breakfast. Thanks for listening. To take full advantage of Seeking Alpha with coverage on significant stocks and ETFs, become a premium subscriber.
Check out seekingalpha.com slash subscriptions. I'm your host, Julie Morgan. Go out and make it a great day.
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