These two companies may disappoint investors over the next few years. It seems like anything related to artificial intelligence (AI) has turned to gold in the last year. There are now trillions of AI-related dollars in value driving the stock market higher as prices soar for anything deemed an AI winner. Most of the largest companies in the world are now related to or investing heavily in AI, meaning that future stock returns hinge on this fast-growing sector. So far, it is keeping up its end of the bargain ...

Core Insights - BigBear.ai (BBAI) is accelerating its global expansion strategy, focusing on converting international pilots into sustainable revenue streams [1][4] - The company reported a revenue of $34.8 million, a 5% year-over-year increase, but it fell short of expectations [2] - A backlog of $385 million, up 30% from the previous year, indicates strong customer trust [2] Financial Performance - The adjusted EBITDA for BigBear.ai was negative $7 million, reflecting operational challenges [3] - The company ended the quarter with $108 million in cash, improving financial flexibility through note conversions [2] Market Position and Competition - BigBear.ai faces competition from established players like Palantir Technologies and C3.ai, which have larger revenue bases and higher market visibility [5][6] - To differentiate itself, BigBear.ai must leverage its niche focus on mission-specific deployments and strengthen international alliances [7] Stock Performance - BBAI shares have surged 174.1% in the past three months, outperforming the Zacks Computers - IT Services industry and the S&P 500 index [8][10] - The stock is currently trading at a forward 12-month price-to-sales (P/S) ratio of 12.08, indicating a discount compared to industry peers [15] Earnings Estimates - BBAI's bottom-line estimates for 2025 remain unchanged at a loss of 41 cents, showing improvement from a loss of $1.10 per share a year ago [12]

The differences between BigBear.ai and Innodata BigBear.ai's three main AI modules -- Observe, Orient, and Dominate -- ingest data, identify trends, and predict future outcomes, respectively. It installs its modules on edge networks, which receive and process that data before it reaches its clients' origin servers. It also shares that data with bigger AI-driven companies, such as Palantir. Before BigBear.ai went public by merging with a special purpose acquisition company (SPAC) in late 2021, it claimed it ...

What's next for BigBear.ai? BigBear.ai stock continues to surge despite no major news Even in the absence of apparent meaningful developments for the business, BigBear.ai stock has continued to rally. The company's big valuation gains appear to be primarily connected to the defense-AI investment trend that has been hot in the market. Palantir has been a top defense-AI play and reached a new valuation high in this week's trading, and BigBear.ai stock has often seen valuation moves that correspond with pricin ...

Company Overview - BigBear.ai was formed through the roll-up of several AI and big data analytics companies by AEI Industrial Partners, and it went public via a SPAC merger in 2021, with some components dating back to 1988 [2] - The company offers biometrics software, including facial recognition and contactless identity screening, deployed at major U.S. airports, along with big data analytics solutions targeting various industries [3] Business Performance - First-quarter revenue increased by 5% year over year to $34.8 million, but operating losses narrowed from $98.1 million to $21.2 million due to a one-time $85 million goodwill impairment charge [4] - Adjusted EBITDA indicates that losses have increased more than fourfold, from $1.6 million to $7 million [5] - Management expresses optimism about strategic focus areas such as border security, trade, and shipbuilding, although it raises questions about the sustainability of these efforts [6] Market Comparison - BigBear.ai and Palantir Technologies both operate in big data analytics and AI-enabled SaaS, but their growth rates differ significantly, with BigBear.ai's sales growing by only 5% compared to Palantir's 39% [8][9] - BigBear.ai has a price-to-sales (P/S) ratio of 12, while Palantir's is 122, indicating a significant valuation difference despite Palantir's higher growth rate [9] Investment Outlook - The stock price of BigBear.ai has increased by 78% year to date, driven by market hype around AI and big data analytics, but fundamental weaknesses may hinder long-term investment potential [10]

Core Insights - Palantir Technologies has become a leading player in the AI and defense tech sector, with its stock rising by 80% in the first half of 2025 and 427% over the past year, making it the top performer in the S&P 500 and Nasdaq-100 [1] - BigBear.ai, a competitor in the defense tech space, has also seen significant stock growth, with shares increasing by 357% over the last year, raising questions about its potential to rival Palantir [2] Company Performance - BigBear.ai's stock has experienced high volatility, initially rising after the announcement of Project Stargate, which aims to invest $500 billion in AI projects by 2029 [3] - Despite early gains, BigBear.ai's stock retreated following the Pentagon's plans to cut its budget by 8% annually, which initially impacted defense contractors negatively [5] - The DOD's budget cuts are focused on non-essential areas, allowing for capital reallocation towards tech initiatives, which may benefit companies like BigBear.ai [6][7] Financial Comparison - BigBear.ai reported $160 million in sales with gross margins below 30%, leading to continued losses [10] - In contrast, Palantir generated $487 million in government revenue in Q1 2025, nearly three times BigBear.ai's annual revenue, with gross margins around 80% and a net income exceeding $570 million over the last year [12] - BigBear.ai's price-to-sales (P/S) ratio is around 11, which appears cheap compared to Palantir's P/S ratio of 120, but the disparity is attributed to Palantir's strong profit margins and growth in both public and private sectors [13] Market Position - BigBear.ai's CEO has strategic ties to the government, which may enhance its visibility and opportunities in the defense sector [8] - However, the company is not expected to become a significant competitor to Palantir, which is viewed as a leader in the defense tech space [14]

Company Performance - BigBear.ai Holdings, Inc. (BBAI) closed at $7.95, reflecting a decrease of -3.28% from the previous day, underperforming the S&P 500 which saw a loss of 0.01% [1] - Over the past month, shares of BigBear.ai have increased by 107.58%, significantly outperforming the Computer and Technology sector which gained 7.44% and the S&P 500 which gained 5.37% [1] Upcoming Earnings - The upcoming earnings report for BigBear.ai is scheduled for August 11, 2025, with projected earnings of -$0.07 per share, indicating a year-over-year decline of 75% [2] - Revenue is expected to be $40.99 million, representing a growth of 3.04% compared to the same quarter last year [2] Annual Forecast - For the entire year, Zacks Consensus Estimates predict earnings of -$0.41 per share and revenue of $166.85 million, reflecting changes of +62.73% and +5.45% respectively compared to the previous year [3] - Recent adjustments to analyst estimates are crucial as they often indicate the latest business trends, with positive revisions suggesting a favorable outlook on the company's health and profitability [3] Industry Context - The Computers - IT Services industry, part of the Computer and Technology sector, holds a Zacks Industry Rank of 82, placing it in the top 34% of over 250 industries [6] - The Zacks Industry Rank measures the strength of individual industry groups, with top-rated industries outperforming lower-rated ones by a factor of 2 to 1 [6]

Core Insights - BigBear.ai's stock closed at $8.22 on July 17, reflecting a significant 15.5% increase, with intraday trading showing volatility between $7.25 and $8.38 [1] - The company's performance outpaced key indices, with the S&P 500 and Nasdaq Composite rising by 0.54% and 0.74% respectively, indicating that the stock's rise was driven by company-specific factors rather than broader market trends [2] - BigBear.ai's trading volume reached approximately 205 million shares, surpassing its 50-day average of 143 million shares and 200-day average of 96 million shares, suggesting increased investor interest due to recent advancements in defense technology [3] Company Performance - The notable 15% climb in BigBear.ai's stock highlights investor enthusiasm towards its recent strategic partnerships in the United Arab Emirates [2] - Compared to competitors like Palantir Technologies and C3.ai, which saw gains of 2% and 4.2% respectively, BigBear.ai's performance indicates a stronger market response to its initiatives [2] Market Activity - The heightened trading activity reflects growing market confidence in BigBear.ai's role within the evolving defense AI landscape, signaling potential for sustained growth [3]

Group 1: Artificial Intelligence in Daily Life - AI is already integrated into daily life through various applications such as voice assistants, personalized recommendations, and smart home devices [1] - The influence of AI is expected to grow even more pervasive in the future [1] Group 2: AI in the U.S. Government - AI is significantly embedded in the U.S. government, with companies like Palantir Technologies and BigBear.ai playing crucial roles in federal projects [2] - Palantir is recognized as a leading name in AI applications within the federal government [4] Group 3: Palantir Technologies - Palantir's stock has seen substantial growth, increasing by 414% over the last 12 months and nearly 90% in 2025 [4] - The company's growth is attributed to its Artificial Intelligence Platform (AIP), which enhances its Gotham and Foundry platforms for government and commercial clients [5] - Palantir is expanding its government contracts beyond military applications, working with various departments to create a centralized government database [6] - Despite a high valuation with a price-to-earnings ratio of 617, Palantir is viewed as a revolutionary stock with long-term potential [7] Group 4: BigBear.ai - BigBear.ai collaborates with the Pentagon and intelligence agencies, with potential for growth if government contracts continue to expand [8] - The company has secured significant contracts, including a $13.2 million award for the Joint Chiefs of Staff and a $165 million contract for U.S. Army system modernization [9] - BigBear.ai reported $34.8 million in revenue for Q1 2025, with a year-over-year growth of 5% and a backlog of $385 million in contracts [10] - The company is moving towards profitability, with a reduced loss of $62 million in Q1 2025 compared to $127.8 million in Q1 2024, and guidance for full-year revenue between $160 million and $180 million [11] - BigBear.ai's price-to-sales ratio of just over 10 is more attractive compared to Palantir's ratio of 113.5, making it a potential investment opportunity [12]

Company Performance - BigBear.ai Holdings, Inc. (BBAI) closed at $7.10, with a gain of +2.6% from the previous trading session, outperforming the S&P 500 which lost 0.4% [1] - Prior to the latest trading day, BBAI shares had increased by 67.15%, significantly surpassing the Computer and Technology sector's gain of 6.34% and the S&P 500's gain of 4.97% [1] Upcoming Financial Results - The company is expected to report an EPS of -$0.07, reflecting a 75% decline compared to the same quarter last year [2] - Revenue is projected to be $40.99 million, indicating a 3.04% increase from the year-ago quarter [2] Fiscal Year Estimates - For the entire fiscal year, the Zacks Consensus Estimates predict an EPS of -$0.41 and revenue of $166.85 million, representing changes of +62.73% and +5.45% respectively from the previous year [3] Analyst Estimates and Market Sentiment - Recent modifications to analyst estimates for BigBear.ai are crucial as they reflect changing business trends, with positive revisions indicating analysts' confidence in performance and profit potential [4] - Changes in estimates are directly related to stock price performance, and investors can leverage this through the Zacks Rank system [5] Zacks Rank and Industry Performance - The Zacks Rank system, ranging from 1 (Strong Buy) to 5 (Strong Sell), has a strong track record, with 1 rated stocks delivering an average annual return of +25% since 1988 [6] - Currently, BigBear.ai holds a Zacks Rank of 3 (Hold) [6] - The Computers - IT Services industry, part of the Computer and Technology sector, has a Zacks Industry Rank of 72, placing it in the top 30% of over 250 industries, indicating strong performance potential [7]