C3.ai jumps 17% after the company announces a 5-year extension of its partnership with Shell

• C3.ai stock jumped as much as 19% on Tuesday before ending the day 17% higher.
• The share price increase came after the company announced a 5-year extension of its Shell partnership.
• C3.ai created the Open AI Energy Initiative (OAI) with Shell, Baker Hughes, and Microsoft earlier this year.

C3.ai shares jumped as much as 19% on Tuesday after the company announced a 5-year extension of its partnership with Shell. The stock closed roughly 17% higher.

The partnership will help accelerate the deployment of enterprise artificial intelligence and machine learning applications on the C3 AI Suite at Shell and across energy markets.

Specifically, it will "address reliability, asset integrity, and process optimization" within energy markets to help enable a transition to clean energy, according to a press release.

The partnership is a "significant expansion of the relationship C3.ai and Shell initially developed several years ago" and will build on on C3.ai's Open AI Energy Initiative (OAI), which was launched earlier this year.

The OAI is a first-of-its-kind open ecosystem of AI solutions to help transform the energy industry launched by C3.ai in conjunction with Shell, Baker Hughes, and Microsoft.

According to C3.ai's Chairman and CEO Thomas Siebel, the program will help "ensure climate security" and drive clean energy adoption through "the digital transformation of the energy industry."

"Together with Shell, we are committed to driving cleaner energy and climate initiatives globally through the power of tried, tested, and scalable enterprise AI-based solutions. Our collaboration will shape the global market for AI/ML applications in the energy and resource industries," Siebel said in a statement.

Thomas Siebel, C3.ai's billionaire CEO and a former Oracle exec, founded the artificial intelligence company in 2009. Since then, it's become a leader in artificial intelligence applications, boasting clients both public and private including the US Air Force, 3M, and Raytheon.

C3.ai went public in December of last year, pricing its initial offering at $42 a share, well above the originally expected range of between $36 and $38 a share.

On its first day of trading, shares opened at $100 and the company ended the day with a 140% gain, boasting a lofty valuation.

In 2021, however, C3.ai's stock has fallen roughly 51% as its growth figures have failed to live up to expectations.

In its first-quarter earnings report on March 1, the company revealed total revenue growth of just 19%, hitting $49.1 million. For a company that was trading at roughly 70x sales, the figure was hardly what investors were hoping for.

Analysts have given C3.ai mixed reviews as well. Morgan Stanley recently tagged the firm with a "sell" rating and a $60 price target.

Overall, C3.ai holds 7 "buy" ratings, 2 "hold" ratings, and 3 "sell" ratings from analysts.

Shares of C3.ai traded up 15.87% as of 3:53 p.m. ET on Tuesday.