C3.ai, Inc. (AI) saw its shares plunge 5% in pre-market trading on Monday, as investors continued to grapple with the company's growth challenges and financial performance. The drop comes despite a recent contract win, highlighting the mixed sentiment surrounding the artificial intelligence software provider.

The sell-off appears to be driven by ongoing concerns about C3.ai's business model and financial health. Despite showing signs of revenue growth stabilization, the company continues to face widening net losses and heavy reliance on stock-based compensation. Analysts expect C3.ai's net loss to expand from $289 million in fiscal 2025 to $300 million in fiscal 2026, raising questions about its path to profitability.

In a positive development, C3.ai announced a new $13 million task order to expand its predictive maintenance program across the U.S. Air Force fleet. However, this contract win seems insufficient to allay investor concerns about the company's broader challenges. The market's reaction suggests that investors are focusing more on C3.ai's financial performance and competitive position in the rapidly evolving AI landscape, rather than individual contract wins.