C3.ai: Short Interest Holds Near 35% as Founders Keep Selling

The Street is fractured and largely pessimistic. This week's analyst activity stayed close to the stock: DA Davidson held its Underperform at a $7 target, Canaccord nudged its target up a dollar to $8 while keeping a Hold, and Wedbush reiterated Outperform at $15. That Wedbush target — nearly double the current price — is a significant outlier. The consensus mean sits at $8.91, roughly in line with the current $8.83 close, implying the Street collectively sees limited upside from here. JP Morgan's Underweight at $7 and Freedom Broker's $9 Hold from March reflect the more cautious majority view. The bear case is stark: subscription revenue declined 16% year-over-year, full-year guidance was slashed by $51 million, and North American and European sales execution has been poor. The bull case rests entirely on the federal channel — a 139% surge in federal bookings — and a restructuring plan targeting $135 million in cost savings that management says will begin to show in the second half of fiscal 2027. The EPS surprise factor score is high at the 92nd percentile, though EPS momentum over both 30 and 90 days is in the single digits, pointing to deteriorating near-term estimate trends rather than improving ones.

Founder selling is the most concrete signal this week. Thomas Siebel, Executive Chairman and founder, sold roughly 481,000 shares across May 15 and May 18 alone — generating approximately $4.2 million in proceeds at prices between $8.65 and $8.72. He has been selling consistently throughout April and into May, with aggregate insider net activity running at around $14.3 million net sold over the past 90 days. CEO Stephen Ehikian added a smaller $429,000 sale in late March. These are systematic-looking disposals rather than one-off events, and they are occurring at prices well below where Wedbush's bull target sits. Vanguard and BlackRock both added modestly in Q1, Millennium Management added 1.8 million shares, and Marshall Wace added 1.2 million — suggesting some institutional buyers are absorbing what insiders are distributing. The institutional picture is mixed rather than clearly one-directional.

The last earnings print is the cleanest benchmark for what June 3 might bring. When AI reported in February, the stock fell 17% on the day and was still down 8% five days later. That was after the company missed estimates, cut guidance, and reported the subscription revenue decline. With short interest 14% higher now than it was going into that print, and borrow costs still minimal, the question heading into June 3 is whether shorts will cover into the event or hold through it — and whether the federal bookings narrative has enough momentum to change the calculus on the subscription decline.

Watch the cadence of short interest in the final two weeks before June 3: any sharp build or unwind will signal which way the more informed money is leaning heading into the print.