Why Is C3.ai (AI) Stock Surging Premarket Today? Merger Talks Surface

C3.ai Inc. shares are experiencing significant premarket gains on Tuesday, January 28, 2026, following reports of potential merger discussions with privately-held automation software company Automation Anywhere. The Information broke the news, citing sources familiar with the negotiations, sending the struggling AI stock up over 16% in early trading.

The potential deal could provide a lifeline for C3.ai, whose valuation has been cut in half over the past year amid concerns about its long-term strategy and revenue generation capabilities.

Market Reacts to Potential Automation Anywhere Deal

According to The Information’s report, the potential transaction would involve Automation Anywhere purchasing C3.ai and subsequently becoming a publicly traded company. The news triggered an immediate positive market response, with C3.ai shares climbing to $14.67 in premarket trading at 5:42 AM EST on January 28, representing a 16.38% surge from the previous close of $12.60.

The stock had closed regular trading down 2.55%, but reversed course dramatically on the merger speculation. Automation Anywhere, which develops software to automate repetitive tasks, was last valued at $6.8 billion in 2019 during a private funding round, significantly higher than C3.ai’s current market capitalization of approximately $1.77 billion.

The timing of these discussions is particularly noteworthy given C3.ai’s recent struggles in the public markets. The company’s stock has plummeted more than 59% over the past year, with its valuation dropping by more than half in 2025 alone. Analysts have expressed growing doubts about the company’s ability to generate sustainable revenue and maintain a competitive edge in the rapidly evolving enterprise AI market.

Reuters had previously reported that C3.ai was exploring strategic alternatives, including a potential sale, after founder Thomas Siebel stepped down as CEO. Neither C3.ai nor Automation Anywhere immediately responded to requests for comment on the merger discussions.

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Company Background and Financial Performance

C3.ai operates as an enterprise artificial intelligence application software company, offering its C3 agentic AI platform that enables customers to design, develop, and deploy large-scale AI applications. The company serves clients across multiple sectors, including the U.S. government, Air Force, energy, and manufacturing industries.

Its product suite includes C3 AI CRM Suite for customer relationship management, C3 Generative AI for data retrieval, and specialized solutions for healthcare and financial services. Despite securing new federal contracts and receiving FedRAMP authorization, the company continues to face profitability challenges with a profit margin of -108.05% and a return on equity of -46.77%.

The company’s financial metrics paint a challenging picture. C3.ai reported revenue of $352.91 million over the trailing twelve months but posted a net loss of $381.34 million, resulting in diluted earnings per share of -$2.84. For the second quarter of fiscal year 2026, analysts are forecasting a loss of $0.29 per share, though the company beat estimates in the most recent quarter with an actual loss of $0.25 per share versus expectations of -$0.33.

With 1,181 full-time employees and total cash reserves of $675.03 million as of the most recent quarter, C3.ai maintains a relatively strong balance sheet despite ongoing operational losses. Analyst price targets for the stock range from a low of $8.00 to a high of $24.00, with an average target of $14.67.

Disclaimer: The author does not hold or have a position in any securities discussed in the article. All stock prices were quoted at the time of writing.