C3 AI (AI) Stock: Army Contract Sends Shares Higher on Defense AI Expansion

TLDR

• C3 AI stock rose 2% after winning a U.S. Army contract for AI-driven logistics in combat operations
• The Army’s Rapid Capabilities and Critical Technologies Office selected C3 AI to forecast parts, fuel, and munitions needs
• The company reported fiscal Q2 2026 revenue of $75.1 million, beating expectations with 7% sequential growth
• Subscription revenue grew 16.5% quarter-over-quarter, with Microsoft and AWS partnerships driving 89% of bookings
• Stock trades at $15.46, well below its 52-week high of $45.08, with analysts maintaining cautious ratings

C3 AI stock gained 2% on Tuesday, trading at around $15.46 after the company secured a contract with the U.S. Army for artificial intelligence-powered logistics technology.

C3.ai, Inc., AI

The U.S. Army Rapid Capabilities and Critical Technologies Office chose C3 AI to build AI-driven logistics capabilities for Army units in contested environments. The system will forecast requirements for parts, fuel, and munitions to support combat readiness.

C3 AI will integrate its application into Brigade Command and Control networks. The technology will help re-supply and distribution operations for forward-deployed units while reducing operational risks.

The company will use components from its existing C3 AI Contested Logistics and C3 AI Readiness applications. These systems already operate at the Defense Logistics Agency and U.S. Air Force.

The technology will predict critical repair part shortfalls and forecast fuel consumption. It will also project munition requirements to help maintain operational tempo in high-risk environments.

Recent Financial Performance

C3 AI reported fiscal Q2 2026 results on December 3. Revenue reached $75.1 million, up 7% from the previous quarter and slightly ahead of analyst expectations.

The company posted an earnings per share loss of $0.25. Analysts had expected a loss of $0.33, making the result a positive surprise for investors.

Management guided Q3 revenue to a range of $72 million to $80 million. The company projected full fiscal year 2026 revenue between $289.5 million and $309.5 million.

C3 AI continues to operate at a loss under non-GAAP measures. The company remains in growth mode while working toward profitability.

Partnership Momentum Drives Bookings

Subscription revenue showed strong growth, rising 16.5% quarter-over-quarter. The company’s partner ecosystem with Microsoft and AWS now generates close to 89% of bookings.

This partnership strategy appears to be working. The cloud platform relationships give C3 AI access to enterprise customers through established sales channels.

The Army contract represents another high-profile federal reference win. RCCTO focuses on delivering next-generation technologies to close capability gaps and enhance battlefield readiness.

The stock trades well below its 52-week high of $45.08. It sits just a few dollars above its 12-month low of $12.59, reflecting pressure on expensive AI software names.

Intraday trading ranged between $15.12 and $15.90. Volume remained moderate as investors digested the contract news against broader sector headwinds.

Analysts maintain cautious ratings on the stock. The average recommendation sits around “Reduce,” reflecting concerns about persistent losses and execution risk despite revenue growth.

The broader AI trade has cooled in recent months. Some strategists have flagged rotation out of expensive AI stocks toward cheaper, more traditional sectors, which has capped upside for companies like C3 AI.

The Army contract adds to C3 AI’s federal portfolio. The company already works with multiple defense and civilian agencies on AI applications for logistics, readiness, and predictive maintenance.

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