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SentinelOne (S) posted 23% revenue growth, crossed $1 billion in ARR, and carries 21 analyst buy ratings with zero sells.
C3.ai (AI) missed Q3 consensus by 30%, watched gross margin collapse to 17%, and slashed full-year guidance nearly in half.
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C3.ai (NYSE:AI | AI Price Prediction) keeps grabbing headlines as the pure-play enterprise AI software ticker, with a shiny new CEO promising a turnaround and bargain-hunters circling a stock that has shed 59.13% over the past year. But here’s what you should actually be watching.
The most recent quarter was a disaster dressed up as a restructuring. Q3 FY26 revenue came in at $53.26 million, missing consensus by 29.59% and falling 46.08% year over year. GAAP gross margin collapsed to 17% from 59% a year earlier. Non-GAAP EPS landed at -$0.40 versus a -$0.29 estimate, and free cash flow worsened to -$56.20 million.
Management slashed full-year FY26 revenue guidance to $246.7 million to $250.7 million, down from a prior outlook of $447.5 million to $484.5 million. Founder Thomas Siebel stepped aside citing health issues, a new CEO is six months into a top-to-bottom reorganization, and Wall Street is unimpressed: the consensus analyst target sits at just $8.82, with three sell and three strong sell ratings against a single buy. This is a workout.
SentinelOne (NYSE:S) closed at $18.71 on May 22, up 27.89% over the past month and 24.73% year to date. It fits the under-$20 mandate, sits at the intersection of AI and cybersecurity, and unlike C3.ai, the fundamentals are accelerating in the right direction. Three points make the case.
1. Profitability has inflected. Q3 FY26 revenue rose 22.9% to $258.91 million, non-GAAP EPS came in at $0.07 against a -$0.175 estimate, and non-GAAP operating margin hit a record 7%, an improvement of roughly 1,200 basis points year over year. Annual recurring revenue crossed $1.06 billion, and free cash flow was a positive $15.90 million.
2. The AI security mix is the real story. Roughly 50% of quarterly bookings now come from emerging Data, AI, and Cloud products, with the Data segment posting triple-digit bookings growth on AI SIEM demand. Purple AI, the Observo AI data-streaming acquisition, and the Prompt Security acquisition for GenAI runtime protection put SentinelOne directly in the path of every enterprise asking how to secure AI workloads. CEO Tomer Weingarten framed it bluntly: “Our early-mover advantage and approach for both AI for Security and Security for AI is resonating with customers.”
3. The scoreboard already shows it. Large customers paying $100,000-plus in ARR climbed to 1,572, up 20%. Management has repurchased $101.9 million of stock through the first nine months, FedRAMP High authorization is expanding the federal footprint, and analysts carry a consensus target of $18.74 with three strong buy and 21 buy ratings versus zero sells.
C3.ai is asking investors to underwrite a turnaround on a shrinking revenue base with 17% gross margins. SentinelOne is delivering 22.9% growth, a $1.06 billion ARR base, and the first sustained positive operating margin in its history, still trading under $20. SentinelOne’s accelerating fundamentals and sub-$20 price are worth tracking, with the next pullback offering a potential entry point for investors evaluating the AI security theme.
Joel South covers large-cap stocks, dividend investing, and major market trends, with a focus on earnings analysis, valuation, and turning complex data into actionable insights for investors.
He brings more than 15 years of experience as an investor and financial journalist, including 12 years at The Motley Fool, where he served as an investment analyst, Bureau Chief, and later led the Fool.com investing news desk. He has also co-hosted an investing podcast and appeared across TV and radio discussing market trends.
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