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C3.ai bookings improved across commercial and federal markets, but losses and margin pressure remain.
Enterprise AI is moving from hype to execution, and C3.ai, Inc. (AI - Free Report) and Palantir Technologies Inc. (PLTR - Free Report) sit at the center of that transition. Both companies promise to help organizations turn massive datasets into real-world decisions, but their paths to monetizing AI look very different. As investors become more selective, the debate is no longer about who talks AI better, but who delivers results that translate into durable growth and profits.
C3.ai positions itself as a pure-play enterprise AI platform, offering prebuilt applications designed to speed adoption across industries. Palantir, meanwhile, leans on deeply embedded software, long-term contracts, and growing traction beyond government into commercial markets. With AI spending accelerating but valuations under scrutiny, this faceoff asks a timely question: which enterprise AI stock looks like the stronger bet right now?
The Case for AI
C3.ai delivered a clear improvement in commercial momentum during second-quarter fiscal 2026, highlighted by a sharp sequential acceleration in bookings. Management pointed to strong high-value deal activity, including a growing number of seven-figure and multi-million-dollar contracts, suggesting that customers are moving beyond pilots toward broader production deployments. Despite macro and government-related disruptions, the company demonstrated that demand for enterprise AI solutions remains intact, with bookings emerging as a leading indicator of a potential growth re-acceleration.
The federal segment stood out as a major source of strength, with bookings across defense, aerospace, and civilian agencies rising meaningfully year over year. Management emphasized a structural shift within government toward commercial off-the-shelf AI solutions, which directly benefits C3.ai’s platform strategy. Expanding relationships with agencies such as HHS and the intelligence community underscore the company’s ability to deliver secure, scalable AI in mission-critical environments, an area where switching costs are high and contract lifespans are long.
C3.ai continues to differentiate itself through a broad enterprise AI platform supported by a rapidly expanding partner ecosystem. Strategic alliances with Microsoft, AWS, and leading system integrators are translating into tangible results, with most bookings now sourced through partners. The launch of agentic process automation further broadens the addressable market by enabling customers to automate entire business workflows using AI agents, positioning the company to capture use cases beyond traditional analytics.
While execution improved, C3.ai is still operating with sizable losses and negative free cash flow. Management acknowledged that gross margins remain compressed due to the shift in mix toward initial production deployments and ongoing investments in sales and support capacity. Although leadership outlined a detailed plan to restore growth and move toward non-GAAP profitability, investors are still being asked to underwrite continued losses in the near term, making execution discipline critical from now on.
The Case for PLTR
Palantir is demonstrating what true enterprise AI adoption looks like at scale, and the numbers make that clear. The company delivered explosive growth in third-quarter 2025, with revenue up more than 60% year over year and U.S. commercial sales more than doubling. Unlike many AI vendors still stuck in pilot phases, Palantir is converting demand into large, fast-closing enterprise contracts. Customers are not just testing AI tools; they are rapidly expanding deployments across entire organizations, signaling confidence that Palantir’s platforms deliver tangible operational and financial impact.
A major differentiator is Palantir’s Artificial Intelligence Platform (AIP), which management positions as production-grade AI rather than experimental software. The company emphasized that enterprises are moving beyond isolated use cases toward company-wide AI transformations led directly by the C-suite. This shift is shortening sales cycles and driving unusually large contract expansions, as customers reorganize workflows, decision-making, and data infrastructure around Palantir’s ontology-driven architecture. That depth of integration raises switching costs and strengthens long-term customer relationships.
Just as important, Palantir is pairing hypergrowth with exceptional profitability. The company posted operating margins of more than 50% and generated record free cash flow, pushing its Rule of 40 score well above 100, a level rarely seen in enterprise software. Management also raised full-year guidance across revenue, margins, and cash flow, underscoring confidence that demand momentum is sustainable. In a market crowded with AI narratives, Palantir stands out by demonstrating it can scale rapidly while delivering real earnings power, not just future promises.
Price Performance
AI stock has plunged 39.5% in the past six months against the S&P 500’s growth of 15%. Conversely, PLTR shares have surged 35.5% in the same time frame.
Price Performance
Image Source: Zacks Investment Research
Valuation
C3.ai is trading at a forward 12-month price-to-sales (P/S) ratio of 6.4X, below its three-year median of 8.37X.
PLTR’s forward sales multiple sits at 74.69X, above its three-year median of 19.69X. The C3.ai stock is trading at a deep discount when compared with the sector average and PLTR.
P/S (F12M)
Image Source: Zacks Investment Research
Comparing EPS Projections: AI & PLTR
The Zacks Consensus Estimate for AI’s fiscal 2026 loss per share has narrowed to $1.21 in the past 60 days. Moreover, the consensus mark for fiscal 2027 loss per share has narrowed to $1.00 from $1.01 in the same time frame.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for PLTR’s 2025 earnings per share has increased to 73 cents in the past 60 days. Moreover, the consensus mark for 2026 earnings per share has increased to $1.04 from 86 cents in the same time frame.
Image Source: Zacks Investment Research
Conclusion
The faceoff highlights Palantir as the clearer near-term winner, as it is already translating enterprise AI demand into scaled deployments, sticky customer relationships, and strong profitability. Its AI platform is becoming embedded in core business operations, giving investors visibility into durable growth rather than just future potential.
C3.ai, Inc., meanwhile, is showing early signs of a recovery with improving bookings and broader platform adoption, but ongoing losses mean the payoff depends on sustained execution. As a result, Palantir looks compelling to consider now, while C3.ai is better viewed as a hold until its improving momentum consistently translates into profits.
Image: Bigstock
C3.ai and Palantir: Who Wins the Battle of Enterprise AI Stocks Now?
Key Takeaways
Enterprise AI is moving from hype to execution, and C3.ai, Inc. (AI - Free Report) and Palantir Technologies Inc. (PLTR - Free Report) sit at the center of that transition. Both companies promise to help organizations turn massive datasets into real-world decisions, but their paths to monetizing AI look very different. As investors become more selective, the debate is no longer about who talks AI better, but who delivers results that translate into durable growth and profits.
C3.ai positions itself as a pure-play enterprise AI platform, offering prebuilt applications designed to speed adoption across industries. Palantir, meanwhile, leans on deeply embedded software, long-term contracts, and growing traction beyond government into commercial markets. With AI spending accelerating but valuations under scrutiny, this faceoff asks a timely question: which enterprise AI stock looks like the stronger bet right now?
The Case for AI
C3.ai delivered a clear improvement in commercial momentum during second-quarter fiscal 2026, highlighted by a sharp sequential acceleration in bookings. Management pointed to strong high-value deal activity, including a growing number of seven-figure and multi-million-dollar contracts, suggesting that customers are moving beyond pilots toward broader production deployments. Despite macro and government-related disruptions, the company demonstrated that demand for enterprise AI solutions remains intact, with bookings emerging as a leading indicator of a potential growth re-acceleration.
The federal segment stood out as a major source of strength, with bookings across defense, aerospace, and civilian agencies rising meaningfully year over year. Management emphasized a structural shift within government toward commercial off-the-shelf AI solutions, which directly benefits C3.ai’s platform strategy. Expanding relationships with agencies such as HHS and the intelligence community underscore the company’s ability to deliver secure, scalable AI in mission-critical environments, an area where switching costs are high and contract lifespans are long.
C3.ai continues to differentiate itself through a broad enterprise AI platform supported by a rapidly expanding partner ecosystem. Strategic alliances with Microsoft, AWS, and leading system integrators are translating into tangible results, with most bookings now sourced through partners. The launch of agentic process automation further broadens the addressable market by enabling customers to automate entire business workflows using AI agents, positioning the company to capture use cases beyond traditional analytics.
While execution improved, C3.ai is still operating with sizable losses and negative free cash flow. Management acknowledged that gross margins remain compressed due to the shift in mix toward initial production deployments and ongoing investments in sales and support capacity. Although leadership outlined a detailed plan to restore growth and move toward non-GAAP profitability, investors are still being asked to underwrite continued losses in the near term, making execution discipline critical from now on.
The Case for PLTR
Palantir is demonstrating what true enterprise AI adoption looks like at scale, and the numbers make that clear. The company delivered explosive growth in third-quarter 2025, with revenue up more than 60% year over year and U.S. commercial sales more than doubling. Unlike many AI vendors still stuck in pilot phases, Palantir is converting demand into large, fast-closing enterprise contracts. Customers are not just testing AI tools; they are rapidly expanding deployments across entire organizations, signaling confidence that Palantir’s platforms deliver tangible operational and financial impact.
A major differentiator is Palantir’s Artificial Intelligence Platform (AIP), which management positions as production-grade AI rather than experimental software. The company emphasized that enterprises are moving beyond isolated use cases toward company-wide AI transformations led directly by the C-suite. This shift is shortening sales cycles and driving unusually large contract expansions, as customers reorganize workflows, decision-making, and data infrastructure around Palantir’s ontology-driven architecture. That depth of integration raises switching costs and strengthens long-term customer relationships.
Just as important, Palantir is pairing hypergrowth with exceptional profitability. The company posted operating margins of more than 50% and generated record free cash flow, pushing its Rule of 40 score well above 100, a level rarely seen in enterprise software. Management also raised full-year guidance across revenue, margins, and cash flow, underscoring confidence that demand momentum is sustainable. In a market crowded with AI narratives, Palantir stands out by demonstrating it can scale rapidly while delivering real earnings power, not just future promises.
Price Performance
AI stock has plunged 39.5% in the past six months against the S&P 500’s growth of 15%. Conversely, PLTR shares have surged 35.5% in the same time frame.
Price Performance
Image Source: Zacks Investment Research
Valuation
C3.ai is trading at a forward 12-month price-to-sales (P/S) ratio of 6.4X, below its three-year median of 8.37X.
PLTR’s forward sales multiple sits at 74.69X, above its three-year median of 19.69X. The C3.ai stock is trading at a deep discount when compared with the sector average and PLTR.
P/S (F12M)
Image Source: Zacks Investment Research
Comparing EPS Projections: AI & PLTR
The Zacks Consensus Estimate for AI’s fiscal 2026 loss per share has narrowed to $1.21 in the past 60 days. Moreover, the consensus mark for fiscal 2027 loss per share has narrowed to $1.00 from $1.01 in the same time frame.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for PLTR’s 2025 earnings per share has increased to 73 cents in the past 60 days. Moreover, the consensus mark for 2026 earnings per share has increased to $1.04 from 86 cents in the same time frame.
Image Source: Zacks Investment Research
Conclusion
The faceoff highlights Palantir as the clearer near-term winner, as it is already translating enterprise AI demand into scaled deployments, sticky customer relationships, and strong profitability. Its AI platform is becoming embedded in core business operations, giving investors visibility into durable growth rather than just future potential.
C3.ai, Inc., meanwhile, is showing early signs of a recovery with improving bookings and broader platform adoption, but ongoing losses mean the payoff depends on sustained execution. As a result, Palantir looks compelling to consider now, while C3.ai is better viewed as a hold until its improving momentum consistently translates into profits.
PLTR currently carries a Zacks Rank #2 (Buy), whereas AI has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.