Two AI Stocks Facing Earnings Challenges Worth Monitoring Closely

When promising companies stumble, investors often see it as a buying opportunity. Yet some of today’s most significant stock declines stem from fundamental business problems rather than temporary market setbacks. Two technology companies that have experienced dramatic collapses—losing over 60% of their market value in just 12 months—illustrate why patience may be wiser than bargain hunting. C3.ai and The Trade Desk represent different sectors but share a common thread: their recent AI earnings reports and financial trajectories suggest further caution is warranted before jumping in.

C3.ai’s AI Earnings Falter Amid Rising Losses

C3.ai, the enterprise artificial intelligence solutions provider, has seen its stock plummet 61% over the past year—a stunning reversal given the excitement surrounding AI adoption across industries. The company’s recent AI earnings paint an even grimmer picture than the stock price alone suggests. During the six-month period ending October 31, 2025, the company’s total revenue declined by 20%, landing at $145.4 million. More troubling is the trajectory on the bottom line: losses have expanded dramatically, growing from $128.8 million over two quarters to $221.4 million—a development that signals deepening operational challenges.

The company’s leadership underwent significant transition when Stephen Ehikian assumed the CEO role from founder Thomas Siebel, adding uncertainty during a critical period. Despite offering over 130 enterprise AI solutions, growth simply hasn’t materialized. The gap between the company’s extensive product portfolio and its actual market traction represents a fundamental problem that lower stock valuations alone cannot fix. Until C3.ai demonstrates it can convert its technology investments into profitable growth and positive AI earnings momentum, the stock may continue facing headwinds regardless of recent price declines.

The Trade Desk Confronts Slowing Growth and Management Instability

The Trade Desk presents an even more severe cautionary tale, with shares down a staggering 72% over the same 12-month window. The advertising technology company operates in an inherently competitive landscape where its major customers are increasingly cautious about ad spending amid broader economic uncertainty. This challenging environment became more complicated by recent management turbulence. On January 26, the company announced that Tahnil Davis would assume the interim CFO role, marking the third chief financial officer transition in recent months following Alex Kayyal’s appointment in August and Laura Schenkein’s departure.

The frequent leadership changes at the executive level raise questions about organizational stability and strategic direction. Beyond management concerns, the company’s core business metrics are deteriorating. The Trade Desk’s growth rate has decelerated from 27% to 18% in its most recent quarter—a particularly problematic trend for a company whose premium valuation is built on growth expectations. Currently trading near 40 times trailing earnings, The Trade Desk appears expensive for a business facing simultaneous headwinds of slowing expansion and customer spending uncertainty.

The Case for Patience Over Bargain Hunting

While both stocks have experienced dramatic declines, their substantial market value losses do not guarantee further downside is complete. However, neither company has yet provided compelling evidence that current prices represent genuine bargains. For C3.ai, investors must wait for concrete proof that AI earnings will recover and losses will contract—not just promises of future potential. For The Trade Desk, management stabilization and renewed growth momentum would need to materialize before the current valuation becomes justifiable.

The fundamental principle remains unchanged: falling prices attract investors naturally, but the best buys occur when declining valuations meet improving business fundamentals. Until these companies demonstrate such inflections in their AI earnings performance and operational metrics, a watchful waiting approach appears far more prudent than attempting to catch a falling knife.