Key Points BigBear.ai's gross margin is far lower than that of its peers. BigBear.ai's growth rate leaves a lot ot be desired. 10 stocks we like better than BigBear.ai › BigBear.ai (NYSE: BBAI) is a popular pure-play AI stock. Investors focused on it because it has the potential to skyrocket if everything goes right. Currently, it trades between $6 and $7, so for it to reach $10 in 2026 would be a huge deal. However, BigBear.ai isn't your typical artificial intelligence software company, and there ...

Core Insights - BigBear.ai Holdings Inc. has entered a strategic partnership with Tsecond to develop AI-enabled edge infrastructure for military applications [1][2] - The collaboration aims to integrate BigBear.ai's ConductorOS with Tsecond's BRYCK platform, enhancing the deployment of AI for US national security organizations [2][3] - The new platform will improve threat detection and decision-making capabilities in environments where connectivity is limited [3][4] Company Overview - BigBear.ai is a technology company that provides AI-powered decision intelligence services to governments and industries, focusing on national security and critical infrastructure [5] - The company operates on a global scale, emphasizing its role in enhancing national security through advanced AI solutions [5] Strategic Partnership Details - The partnership with Tsecond will allow tactical teams to process data quickly, detect threats sooner, and make informed decisions without relying heavily on cloud computing [3][4] - This integration is expected to equip national security teams with the necessary tools for decisive action in disconnected environments [4]

Core Viewpoint - BigBear.ai's stock has surged 76% in 2025 despite significant revenue declines and soaring losses, raising questions about the underlying reasons for this increase [2][3]. Company Performance - BigBear.ai's revenue fell 18% in Q2 2025 to $32.5 million, leading to a revised full-year revenue forecast cut by 22% to between $125 million and $140 million, indicating a 15% to 20% drop from 2024 [10]. - The company's net loss increased nearly 16-fold to $228.6 million, with 61% attributed to a fair-value loss on convertible note derivatives [11]. - The stock has lost about 25% of its value since its public debut, with a current market capitalization of nearly $3.1 billion [9]. Market Position and Contracts - BigBear.ai has secured contracts in military and civilian sectors, including a partnership with Tsecond for battlefield AI solutions and the introduction of a biometric system at Nashville International Airport [3][14]. - The company claims a backlog of $380 million in contracts and a cash balance of $390 million, which may help offset losses [15]. Investor Sentiment - The stock is viewed as overvalued by Wall Street, with an average price target of $5.83 compared to its current price of $7.22, suggesting a 24% overvaluation [21]. - The stock's performance is influenced by retail investors and short sellers, with a significant volume spike observed following positive news [12][13]. Competitive Landscape - BigBear.ai operates in a competitive AI defense market against larger firms like Palantir and established contractors such as Lockheed Martin and Raytheon [19]. - The company's high price-to-sales ratio of 13 is significantly above the S&P 500's ratio of 3.43, raising concerns about its valuation amidst declining revenues [18]. Insider Activity - There has been notable insider selling, including the former interim CFO selling shares shortly before being appointed as CFO [20].

Core Insights - BigBear.ai Holdings, Inc. (NYSE: BBAI) is set to announce its earnings results on November 10th, indicating a significant upcoming event for the company [1] Company Overview - The analysis focuses on BigBear.ai's performance and market behavior prior to the earnings announcement, suggesting it is a relevant time for potential investors to evaluate the company [1] Analyst Perspective - The analysis is intended for a broad audience, from beginners to advanced readers, aiming to provide a clear and reasoned perspective on the company's stock [1]

Core Viewpoint - BigBear.ai's stock has seen a significant increase of approximately 300% over the past year, despite a decline in sales and profitability, raising questions about the sustainability of its current valuation [1][3]. Financial Performance - In Q2, BigBear.ai experienced a substantial revenue decline of 18% year over year, with sales dropping to $32.5 million, primarily due to spending cuts by the Trump administration [3]. - The company reported a net loss of $228.6 million in Q2, indicating ongoing profitability challenges [3]. Market Valuation - Despite poor financial performance, BigBear.ai's stock price remains elevated, reflected in a price-to-sales (P/S) ratio of 13, which is significantly higher than the P/S ratio of 4 at the end of Q1 [5]. - The current market capitalization of BigBear.ai is $3 billion, with a current stock price of $7.04 [4][5]. Future Considerations - The upcoming Q3 earnings report on November 10 is critical for assessing potential revenue recovery, and it is suggested to wait for these results before making investment decisions [6].

Core Insights - BigBear.ai's deployment of the veriScan biometric identity platform at Chicago O'Hare International Airport enhances border efficiency and safety, enabling faster and more secure entry for returning U.S. citizens [1][2] - The Enhanced Passenger Processing (EPP) system reduces average processing time from 60 seconds to just 10 seconds using real-time AI and facial recognition technology [2] - The stock price of BigBear.ai rose by 2.6% during regular trading and 5.9% in after-hours trading following the announcement, indicating strong investor confidence [3][10] Company Developments - The O'Hare deployment signifies BigBear.ai's growing influence in the homeland security sector, which is expected to benefit from significant federal investment through the One Big Beautiful Bill (OB3) [4] - BigBear.ai reported over $390 million in cash as of Q2 2025, allowing for aggressive scaling of technologies like veriScan across various airports and ports globally [4] - Recent expansions at Nashville International Airport and collaborations in Panama for AI-driven cargo tracking demonstrate BigBear.ai's expanding role in secure travel and trade [5] Competitive Positioning - The O'Hare deployment enhances BigBear.ai's competitive edge in AI-enabled border management, a sector anticipated to grow rapidly as governments modernize their systems [6] - The company's AI platforms, including veriScan, ConductorOS, and Arcas, are operational across multiple sectors, including airport security and maritime surveillance [6] - By proving efficiency and reliability at a major airport, BigBear.ai strengthens its credibility as a leader in AI-driven security infrastructure [7] Market Performance - Year-to-date, BigBear.ai shares have surged by 52.4%, outperforming the Zacks Computers - IT Services industry and the broader S&P 500 index, reflecting growing investor confidence in its national security narrative [8]

Core Insights - The artificial intelligence industry is experiencing rapid growth, but companies like BigBear.ai and C3.ai showcase contrasting financial performances and market strategies [1][2] BigBear.ai Overview - BigBear.ai is positioned as a mission-driven AI integrator focusing on defense, logistics, and national security, benefiting from U.S. government funding initiatives like OB3, which allocates $170 billion for Homeland Security and $150 billion for the Department of Defense [2][4] - In Q2 2025, BigBear.ai reported a revenue decline of 18% year-over-year to $32.5 million but improved its cash position to $390.8 million, enhancing its capacity for acquisitions and growth [4][6] - The company has a $380 million backlog and anticipates revenue between $125 million and $140 million for 2025, indicating potential for reacceleration as government funding materializes [6][10] - Despite a net loss of $228.6 million in Q2 due to one-time charges, the improving balance sheet and international expansion plans provide significant growth options [7] C3.ai Overview - C3.ai's fiscal Q1 2026 results revealed a 19% revenue decline to $70.3 million, with a widened non-GAAP net loss of $49.8 million, attributed to sales restructuring and leadership changes [8][10] - Subscription revenue accounted for 86% of total revenue, and the company secured 46 agreements, including partnerships with major industry players [9][11] - C3.ai's gross margin fell to 52% from 65% due to increased deployment costs, and the company withdrew its fiscal 2026 guidance, reflecting management caution [12][22] Valuation and Market Performance - BigBear.ai trades at a forward price-to-sales (P/S) multiple of 17.89X, while C3.ai trades at 7.63X, both above the sector average of 6.94X, indicating differing investor sentiments [13][14] - Year-to-date, BigBear.ai shares have surged 48.5%, while C3.ai has dropped 49%, reflecting contrasting investor confidence and execution challenges [10][15][16] Future Outlook - BigBear.ai is expected to report a loss of $1.10 per share in 2025, with a projected revenue decline of 16.2% in 2025 but a growth of 24.3% in 2026 as new contracts are expected to scale [20] - C3.ai's EPS estimate for fiscal 2026 has widened to a loss of $1.33, with revenues expected to decline sharply before rebounding in fiscal 2027 [22][23] - BigBear.ai's strategic leverage to government spending and its strong cash position suggest more immediate upside potential, while C3.ai may require time to stabilize and recover [25][27]

Core Insights - BigBear.ai Holdings, Inc. (BBAI) is positioning itself as a significant player in the defense technology sector by utilizing Artificial Intelligence (AI), machine learning, and data analytics to enhance capabilities for the U.S. Department of Defense (DoD) [1][2] - The company has a growing portfolio of contracts that indicates its integration into military modernization efforts, including a recent collaboration with Tsecond, Inc. to provide AI-enabled edge infrastructure [2][3] - Legislative support through the One Big Beautiful Bill (OB3) is expected to enhance BBAI's long-term revenue visibility, with substantial funding allocated to the DoD and Department of Homeland Security for disruptive defense technologies [3][4] Company Performance - BBAI shares have increased by 158.9% over the past six months, outperforming competitors like Palantir Technologies Inc. (PLTR) and C3.ai, Inc. (AI) [5][8] - The stock is currently trading at a forward 12-month price-to-sales (P/S) ratio of 19.17, which is higher than Palantir's 80.54 and C3.ai's 7.93 [10][11] Financial Estimates - BBAI's earnings per share (EPS) estimates for 2025 and 2026 remain unchanged at a loss of $1.10 and $0.32, respectively, with 2026 indicating a year-over-year growth of 71.2% [12]

Core Insights - Palantir Technologies Inc. and BigBear.ai Holdings, Inc. are both benefiting from the expanding artificial intelligence software market, with both stocks increasing over 300% in the past year [1] Palantir Technologies Inc. - Palantir reported a strong second-quarter performance, with U.S. revenues increasing by 68% year-over-year, driven by a 93% rise in commercial revenues and a 53% increase in government revenues [2][10] - The company secured 157 deals in Q2, each worth at least $1 million, with 66 deals valued at a minimum of $5 million, leading to a record total contract value of $2.27 billion, a 140% year-over-year increase [3][10] - Palantir raised its full-year 2025 revenue guidance to between $4.142 billion and $4.150 billion, with projected Q3 revenues between $1.083 billion and $1.087 billion [4] BigBear.ai Holdings, Inc. - BigBear.ai's second-quarter performance was disappointing, with revenues totaling $32.5 million, down 18% from $39.8 million in the same period last year [5][10] - The company revised its full-year revenue forecast to between $125 million and $140 million, down from a previous estimate of $160 million to $180 million, due to delays in U.S. government contract approvals [6] - BigBear.ai had a backlog of $380 million as of June 30, 2025, but only 4% of this backlog is secured and authorized, indicating potential challenges in contract approval processes [7] - The company reported a non-GAAP adjusted EBITDA loss of $8.5 million in Q2, significantly higher than the $3.7 million loss a year earlier, attributed to increased R&D expenses and low gross margins [8] Investment Considerations - Investors may consider heavily investing in Palantir due to its strong growth prospects and raised revenue forecasts, with a forward price-to-sales ratio of 103.27, significantly higher than the industry average of 6.28 [9] - In contrast, BigBear.ai is struggling to establish a strong customer base and remains unprofitable, raising concerns about its long-term sustainability [11] - Despite challenges, BigBear.ai's recent partnership with the U.S. Navy and deployment of its solutions may improve its prospects, suggesting a small allocation of investment could be considered [12]

Core Viewpoint - BigBear.ai Holdings, Inc. (NYSE:BBAI) is experiencing significant volatility due to its high short interest, making it susceptible to short squeezes, which presents potential investment opportunities [1][2]. Short Interest and Squeeze Dynamics - The current short interest for BigBear is 21.5%, which is considered extremely high and increases the likelihood of a short squeeze [2]. - Short squeezes occur when the stock price rises, leading to increased losses for short sellers, prompting them to buy back shares, which further drives the price up [2][3]. - A panic can ensue among short sellers as losses mount, resulting in a bidding war that pushes the stock price even higher [4]. Historical Performance - There have been two notable short squeezes for BigBear this year, with the first causing a price increase of approximately 125% and the second a rise of 95% [5]. Volatility and Investment Opportunities - Following a short squeeze, the stock may revert to its previous price levels, indicating that holders of BigBear may face extreme volatility, but this volatility also presents opportunities for profit [7].