JPMorgan downgraded C3 AI (AI) to Underweight from Neutral with an unchanged price target of $28. The firm understands that C3.ai is going after a “massive and rapidly evolving” opportunity around artificial intelligence, but thinks the company’s “uneven and subpar growth-plus-margin performance leaves a lot to be desired.” While the company’s revenue growth has improved lately, the incremental costs to drive that growth appear high, with incremental margins being essentially flat and the current guide implying an incremental margin of negative 30%, the analyst tells investors in a research note.
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