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Will AI's Diversification Beyond Oil & Gas Fuel Its Next Growth Phase?
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Key Takeaways
AI's non-oil and gas revenues rose 48% in FY25, showcasing momentum across diverse industries.
Manufacturing clients expand use of AI for predictive maintenance, energy and supply chain gains.
State and local government revenues more than doubled in FY25, with 71 new agreements signed.
C3.ai, Inc. (AI - Free Report) is gaining traction outside its long-standing oil and gas foundation, signaling that diversification may be the next major driver of enterprise AI adoption. In fiscal 2025, the company reported a 48% year-over-year increase in non-oil and gas revenues, reflecting accelerating demand across manufacturing, state and local government, and life sciences.
In manufacturing, C3.ai is expanding its role with customers such as US Steel, Rolls-Royce and Ingersoll Rand, while deepening deployments with existing clients like Nucor and Coke. Applications in predictive maintenance, energy optimization and supply chain visibility are proving scalable, helping industrial players drive measurable efficiency gains.
The public sector is also emerging as a key vertical. In fiscal 2025, state and local government revenues more than doubled, with 71 new agreements signed across 24 states. Deployments span property tax valuation, law enforcement analytics and public program optimization — demonstrating the adaptability of C3.ai’s platform beyond corporate environments.
Life sciences represent another promising growth area. Companies such as GSK, Sanofi, Bristol-Myers Squibb and Boston Scientific are adopting C3.ai’s AI-driven solutions to streamline clinical workflows and leverage research data more effectively. Early traction suggests growing demand for AI applications tailored to healthcare and pharmaceutical innovation.
At the same time, C3.ai reinforced its oil and gas base by renewing its strategic alliance with Baker Hughes through 2028. The partnership, which has already generated more than $0.5 billion in revenues, remains a steady revenue engine. Yet management underscored that diversification across 19 industries will increasingly define the company’s long-term growth trajectory.
With a renewed energy foundation and expanding adoption across manufacturing, government and life sciences, C3.ai is moving from sector-specific success to broader enterprise relevance. Its current focus on vertical diversification and scalable AI applications positions the company to extend revenues and cement its role as a core provider of enterprise-grade AI across industries.
How It Stacks Up to Competitors
Snowflake Inc. (SNOW - Free Report) has steadily expanded beyond its roots in cloud data warehousing, positioning itself as a broader data and AI platform. In first-quarter fiscal 2026, management highlighted that nearly 90% of its top 100 customers are now engaging with AI and ML workloads, underscoring the company’s pivot into AI-driven applications. Snowflake’s Cortex AI offering is gaining traction across industries, with healthcare clients leveraging it for clinical research acceleration and financial institutions adopting it for fraud detection and risk management. Snowflake is guiding for product revenue growth in the mid-teens for fiscal 2026, supported by stronger AI adoption and increased cross-selling into its existing customer base.
Palantir Technologies Inc. (PLTR - Free Report) is also pushing aggressively into AI-enabled diversification. The company continues to balance strong government demand — highlighted by a $10 billion, 10-year enterprise agreement with the U.S. Army — with rapid adoption in healthcare, financial services and manufacturing. Customers such as Citibank, Fannie Mae and Nebraska Medicine are reporting tangible operational gains, from reducing fraud detection cycles from months to seconds to dramatically improving patient discharge workflows. Palantir’s Artificial Intelligence Platform is becoming a foundation for enterprises to re-platform away from hyperscaler stacks, giving it a differentiated moat in production AI. Going forward, Palantir is optimistic about accelerating demand for enterprise AI production. Management has raised full-year 2025 revenue guidance to over $4.14 billion, reflecting growth of 45% year over year.
AI’s Price Performance, Valuation & Estimates
Shares of C3.ai have declined 28.9% in the past year compared with the industry’s fall of 8.4%.
Image Source: Zacks Investment Research
From a valuation standpoint, AI trades at a forward price-to-sales ratio of 5.88X, significantly below the industry’s average of 17.15X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for AI’s fiscal 2026 earnings per share (EPS) implies a year-over-year downtick of 239%, while fiscal 2027 EPS indicates a surge of 65.9% year over year. The EPS estimates for fiscal 2026 and 2027 have declined in the past 30 days.
Image: Shutterstock
Will AI's Diversification Beyond Oil & Gas Fuel Its Next Growth Phase?
Key Takeaways
C3.ai, Inc. (AI - Free Report) is gaining traction outside its long-standing oil and gas foundation, signaling that diversification may be the next major driver of enterprise AI adoption. In fiscal 2025, the company reported a 48% year-over-year increase in non-oil and gas revenues, reflecting accelerating demand across manufacturing, state and local government, and life sciences.
In manufacturing, C3.ai is expanding its role with customers such as US Steel, Rolls-Royce and Ingersoll Rand, while deepening deployments with existing clients like Nucor and Coke. Applications in predictive maintenance, energy optimization and supply chain visibility are proving scalable, helping industrial players drive measurable efficiency gains.
The public sector is also emerging as a key vertical. In fiscal 2025, state and local government revenues more than doubled, with 71 new agreements signed across 24 states. Deployments span property tax valuation, law enforcement analytics and public program optimization — demonstrating the adaptability of C3.ai’s platform beyond corporate environments.
Life sciences represent another promising growth area. Companies such as GSK, Sanofi, Bristol-Myers Squibb and Boston Scientific are adopting C3.ai’s AI-driven solutions to streamline clinical workflows and leverage research data more effectively. Early traction suggests growing demand for AI applications tailored to healthcare and pharmaceutical innovation.
At the same time, C3.ai reinforced its oil and gas base by renewing its strategic alliance with Baker Hughes through 2028. The partnership, which has already generated more than $0.5 billion in revenues, remains a steady revenue engine. Yet management underscored that diversification across 19 industries will increasingly define the company’s long-term growth trajectory.
With a renewed energy foundation and expanding adoption across manufacturing, government and life sciences, C3.ai is moving from sector-specific success to broader enterprise relevance. Its current focus on vertical diversification and scalable AI applications positions the company to extend revenues and cement its role as a core provider of enterprise-grade AI across industries.
How It Stacks Up to Competitors
Snowflake Inc. (SNOW - Free Report) has steadily expanded beyond its roots in cloud data warehousing, positioning itself as a broader data and AI platform. In first-quarter fiscal 2026, management highlighted that nearly 90% of its top 100 customers are now engaging with AI and ML workloads, underscoring the company’s pivot into AI-driven applications. Snowflake’s Cortex AI offering is gaining traction across industries, with healthcare clients leveraging it for clinical research acceleration and financial institutions adopting it for fraud detection and risk management. Snowflake is guiding for product revenue growth in the mid-teens for fiscal 2026, supported by stronger AI adoption and increased cross-selling into its existing customer base.
Palantir Technologies Inc. (PLTR - Free Report) is also pushing aggressively into AI-enabled diversification. The company continues to balance strong government demand — highlighted by a $10 billion, 10-year enterprise agreement with the U.S. Army — with rapid adoption in healthcare, financial services and manufacturing. Customers such as Citibank, Fannie Mae and Nebraska Medicine are reporting tangible operational gains, from reducing fraud detection cycles from months to seconds to dramatically improving patient discharge workflows. Palantir’s Artificial Intelligence Platform is becoming a foundation for enterprises to re-platform away from hyperscaler stacks, giving it a differentiated moat in production AI. Going forward, Palantir is optimistic about accelerating demand for enterprise AI production. Management has raised full-year 2025 revenue guidance to over $4.14 billion, reflecting growth of 45% year over year.
AI’s Price Performance, Valuation & Estimates
Shares of C3.ai have declined 28.9% in the past year compared with the industry’s fall of 8.4%.
Image Source: Zacks Investment Research
From a valuation standpoint, AI trades at a forward price-to-sales ratio of 5.88X, significantly below the industry’s average of 17.15X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for AI’s fiscal 2026 earnings per share (EPS) implies a year-over-year downtick of 239%, while fiscal 2027 EPS indicates a surge of 65.9% year over year. The EPS estimates for fiscal 2026 and 2027 have declined in the past 30 days.
Image Source: Zacks Investment Research
AI stock currently has a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.