Palantir Rallied 100%+ in 2025 - This AI Defense Stock Could Be Next

Core Insights - Palantir Technologies Inc. (PLTR) experienced significant revenue growth, with a 135% increase in share price last year, but faces valuation concerns and risks this year [1] - BigBear.ai Holdings, Inc. (BBAI) is positioned for substantial growth due to its recent acquisition and strong cash reserves [1] Palantir Technologies Inc. (PLTR) - Palantir's Artificial Intelligence Platform (AIP) has gained traction among U.S. government and commercial clients, contributing to a revenue of $1.18 billion in Q3 2025, marking a 63% year-over-year increase and an 18% sequential increase [1] - Government segment revenues reached $486 million, up 52% year-over-year and 14% sequentially, while U.S. commercial revenues were $397 million, up 121% year-over-year and 29% quarter-over-quarter [2] - The company forecasts Q4 2025 sales between $1.327 billion and $1.331 billion, with full-year 2025 revenues projected at $4.396 billion to $4.400 billion [3] - Palantir's CEO noted a Rule of 40 score of 114%, indicating strong scalability, but the company remains heavily reliant on government contracts, which could impact future growth [4] - The forward price-to-sales (P/S) ratio for Palantir is 67.9, significantly higher than the Internet-Software industry average of 5.64, indicating high market expectations [5] BigBear.ai Holdings, Inc. (BBAI) - BigBear.ai's stock increased by 21.3% last year, but its outlook for this year is more promising due to the $250 million acquisition of Ask Sage, enhancing its defense AI platform [8] - The integration of Ask Sage allows BigBear.ai to offer a secure generative AI workflow, improving its market position [8] - BigBear.ai raised its full-year 2025 revenue outlook to between $125 million and $140 million, supported by potential increases in government spending [9] - The company reported a net income of $2.5 million in Q3 2025, a turnaround from a net loss of $15.1 million in the same period the previous year, and holds $456.6 million in cash as of September 30, 2025 [10] - BigBear.ai's stock is well-positioned for growth, supported by strong cash reserves, anticipated government spending increases, and positive technical indicators [11]