National Security AI Booms: Where Does BigBear.ai Fit In?

Core Insights - Geopolitical risks and increasing defense budgets are driving the integration of artificial intelligence (AI) into national security modernization, with BigBear.ai (BBAI) positioning itself at the intersection of AI and defense [1][5] Company Performance - In Q1 2025, BigBear.ai reported a 5% year-over-year revenue increase to $34.8 million, primarily due to contracts with the Department of Homeland Security and digital identity projects [2][12] - The company secured a significant deal to deliver and maintain the Department of Defense's Joint Staff J35 Orion AI platform, enhancing its credibility in military applications [2][12] - Despite a wider adjusted EBITDA loss of $7 million in Q1, attributed to government funding delays and increased R&D investments, BigBear.ai has a $385 million backlog and $108 million in cash, positioning it well for future growth [4][12] Competitive Landscape - BigBear.ai faces competition from established players like Palantir Technologies and C3.ai in the national security AI sector [6] - Palantir is recognized for its strong government partnerships and platforms, setting a high benchmark for BigBear.ai in terms of scale and influence [7] - C3.ai, while more commercially diversified, is aggressively targeting defense, focusing on predictive maintenance and logistics, areas where BigBear.ai is also making strides [8][9] Stock Performance - BigBear.ai's stock has surged 101.3% in the past month, outperforming the Zacks Computers - IT Services industry, the Zacks Computer and Technology sector, and the S&P 500 index [10] - The stock is currently trading at a forward 12-month price-to-sales (P/S) ratio of 12.44, indicating it is priced at a discount compared to industry peers [18] Earnings Estimates - Earnings estimates for BigBear.ai indicate a projected loss of 41 cents per share for 2025, showing improvement from a loss of $1.10 per share the previous year [14] - Estimates for 2026 have trended slightly downward to a loss of 21 cents per share [14]