Better Artificial Intelligence (AI) Stock: Palantir vs. BigBear.ai

Core Viewpoint - The article compares two AI stocks, Palantir Technologies and BigBear.ai, highlighting that Palantir is currently a better investment choice due to its strong growth prospects and market position in the AI software sector [1][2]. Group 1: Palantir Technologies - Palantir is recognized as a leading player in the AI software platforms market, as noted by third-party research firms like Forrester and IDC [4]. - The company experienced a 43% year-over-year increase in its overall customer count in Q2 2025, and it closed 157 deals worth at least $1 million, a 64% increase from the previous year [5][7]. - Palantir's AI solutions are significantly enhancing productivity for its customers, with examples such as Citibank reducing onboarding time from nine days to seconds and Fannie Mae decreasing mortgage fraud detection time from two months to seconds [6][7]. - The company's earnings are projected to grow by 57% this year to $0.64 per share, with continued strong growth expected in the following years [8][10]. - Palantir's solid position in the fast-growing AI software market justifies its high valuation, as it is rapidly expanding its customer base and increasing revenue from existing clients [16][18]. Group 2: BigBear.ai - BigBear.ai also offers AI software solutions but has seen its stock price triple in the past year, attracting investor interest despite a lower valuation compared to Palantir [11][12]. - The company ended Q2 with a revenue backlog of $380 million, a 43% increase from the previous year, but its revenue declined by 18% year-over-year to $32.5 million due to challenges in converting Army contracts into revenue [12][13]. - BigBear.ai's reliance on government contracts makes its revenue susceptible to government budgets and policies, leading to a lowered revenue guidance for 2025 to $132.5 million, down from $158 million the previous year [14][15]. - The backlog does not guarantee future growth, and despite being cheaper than Palantir, it does not present a better investment opportunity [15].