Can C3.ai Become the 'Next Defense AI Prime'?—Caught Between Government Windfalls and Private Sector Struggles

In its fiscal second quarter of 2026 (ended October 31, 2025), C3.ai (NYSE: AI) displayed two starkly contrasting faces. On one hand, the company has established itself as an indispensable player in the U.S. defense industrial base, achieving remarkable growth of +89% year-over-year in federal bookings. Securing major contracts with the U.S. Air Force and the Department of Health and Human Services (HHS) strongly confirms that the company's strategic pivot is bearing fruit in the defense and government sectors.