AI and Tech Stocks Plunge as GoDaddy and C3.ai Report Weak Earnings and Guidance

4 hour ago 1 sources neutral

Key takeaways:

  • AI stock sell-off signals market shift from hype to execution scrutiny, pressuring crypto AI tokens.
  • Weak corporate guidance may trigger broader risk-off sentiment, potentially impacting speculative altcoin flows.
  • Watch for contagion into crypto's AI narrative as traditional market growth expectations are reset.

Major technology and artificial intelligence-focused stocks faced a severe sell-off this week following disappointing quarterly results and lowered guidance from two prominent companies, GoDaddy and C3.ai. The sharp declines highlight growing investor concerns about execution challenges and the sustainability of growth in the competitive AI and web services sectors.

GoDaddy's stock plummeted 16% in a single day, closing at $77.34 after the company reported its fourth-quarter earnings. This marked its worst single-day percentage decline since March 2020 and its lowest closing price since November 2023. While the company beat earnings per share (EPS) estimates, posting $1.80 against expectations of $1.58, and reported revenue of $1.27 billion in line with forecasts, two critical metrics spooked investors.

The primary concerns were weak bookings and soft future guidance. Q4 bookings came in at $1.28 billion, missing the $1.31 billion analyst estimate. Growth in the Applications and Commerce division slowed from 14% in Q3 to 11% in Q4. Management attributed this deceleration to a new promotional pricing strategy designed to attract new customers with one-year contracts, which resulted in lower upfront bookings. For the full year 2026, GoDaddy provided revenue guidance of $5.195 billion to $5.275 billion, representing approximately 6% growth at the midpoint, which fell below Wall Street's expectations.

The market reaction was swift and severe. Multiple analysts slashed their price targets. RBC Capital cut its target from $200 to $100, while JPMorgan reduced its target from $200 to $167. Other firms including UBS, Cantor Fitzgerald, and Barclays also issued significant cuts. Analysts expressed concerns that GoDaddy is falling behind competitors like Wix.com and Squarespace in integrating AI features, which could threaten its traditional web design platform business.

Simultaneously, enterprise AI software company C3.ai saw its stock crash roughly 22% in after-hours trading after reporting a significant miss on both revenue and earnings for its fiscal third quarter. The company reported revenue of $53.3 million, far below the consensus estimate of $75.6 million, and a non-GAAP loss per share of $0.40, worse than the expected $0.29 loss. This represented a staggering 46% year-over-year revenue decline.

CEO Stephen Ehikian took full responsibility for the poor results, citing "sales execution" failures in North America and Europe as the core issue. In response, the company announced a major restructuring plan aimed at cutting $135 million in annual costs, which includes a 26% reduction in headcount. Furthermore, C3.ai delivered a devastating guidance cut for Q4, projecting revenue of $48 million to $52 million, dramatically lower than the $77.72 million consensus estimate.

The twin earnings disasters underscore a broader market reassessment of growth expectations for companies positioned in the competitive AI and digital services landscape. While C3.ai noted strength in its federal business, with bookings jumping 134% year-over-year, it was not enough to offset the widespread weakness. Both companies are now trading near multi-year lows, with GoDaddy down 47% over the past year and C3.ai down 61%.

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