Two Tech Stocks to Avoid Despite Steep Declines: C3.ai and The Trade Desk Face Mounting Headwinds
In volatile markets, a falling stock price can signal a bargain—or a warning. For investors eyeing beaten-down tech names C3.ai and The Trade Desk, the evidence increasingly points to the latter. Both companies have seen their shares shed more than half their value over the past year, but underlying business struggles and internal instability suggest these declines are justified, and further downside may lie ahead.
C3.ai (NYSE: AI), once a darling of the artificial intelligence boom, has seen its stock plummet 61% in the last twelve months. The company, which provides enterprise AI software solutions, is grappling with a painful reality check. Despite the sector's hype, C3.ai's financials are moving in the wrong direction. For the six-month period ending October 31, 2025, revenue fell 20% year-over-year to $145.4 million. More alarmingly, its net loss widened dramatically from $128.8 million to $221.4 million over the same period.
The recent leadership change, with Stephen Ehikian replacing founder Thomas Siebel as CEO, underscores the company's urgent need for a new strategic direction. With over 130 pre-built AI applications, C3.ai's challenge isn't a lack of product but a lack of tangible growth. Until it demonstrates a clear path to reversing its revenue slide and curbing massive losses, the stock remains a high-risk proposition, regardless of how cheap it appears.
The Trade Desk (NASDAQ: TTD), a major player in the digital advertising technology space, finds itself in an even deeper hole, with shares down a staggering 72%. The adtech sector is fiercely competitive and highly sensitive to economic cycles. As businesses grow cautious, marketing budgets are often the first to be trimmed, creating a significant headwind for The Trade Desk's growth.
Compounding the macro challenges is unsettling volatility in the C-suite. The company recently announced Tahnil Davis as its interim Chief Financial Officer on January 26, following the appointment of Alex Kayyal as CFO just last August. This revolving door in a key financial leadership role has rattled investor confidence, triggering further sell-offs.
Financially, the narrative is weakening. The company's revenue growth rate decelerated to 18% in its most recent quarter, down from 27%. For a stock traditionally valued on its hyper-growth potential, this slowdown is particularly damaging. Even after its monumental drop, The Trade Desk trades at a rich valuation of approximately 40 times trailing earnings—a premium that looks difficult to justify amid the current business uncertainty and management flux.
Investor Perspectives
Michael R., Portfolio Manager: "This is a classic case of separating the signal from the noise. The market is correctly punishing companies that promised exponential growth but are now delivering contraction and chaos. The CFO musical chairs at The Trade Desk is a major red flag for governance."
Sarah Chen, Tech Analyst: "While the risks are real, it's worth monitoring C3.ai's new CEO strategy. The enterprise AI market is still evolving, and a successful pivot could change the trajectory. However, I agree it's strictly a watchlist item for now."
"BearishBrian" on Investor Forums: "Are you kidding me? Buying these stocks is catching a falling knife. C3.ai is burning cash with no growth, and The Trade Desk's best days are behind it. The entire adtech space is getting squeezed. These aren't dips; they're cliffs."
Priya Sharma, Long-term Investor: "The volatility is unsettling, but I'm holding my small position in The Trade Desk. Their platform is still best-in-class, and when the ad cycle turns, they could rebound sharply. The current price might look like a steal in three years."
Disclosure: The Motley Fool has positions in and recommends The Trade Desk and recommends C3.ai.