Core Insights - C3.ai and BigBear.ai are positioned for growth in the AI software sector, with C3.ai showing stronger fundamentals and growth potential compared to BigBear.ai [1] Group 1: C3.ai Overview - C3.ai provides AI solutions to the Department of Defense and has secured a contract modification with the U.S. Air Force, increasing the contract ceiling to $450 million [2] - Federal government contracts accounted for about one-third of C3.ai's bookings in FY 2025, with significant non-government clients like Exxon Mobil and Dow [3] - C3.ai's revenues reached $389.1 million in FY 2025, a 25% increase year-over-year, with projections for FY 2026 sales between $447.5 million and $484.5 million [4][10] Group 2: BigBear.ai Overview - BigBear.ai's AI software supports U.S. Navy shipbuilding and airport security, reporting revenues of $34.8 million in Q1, a 5% increase from the previous year [5] - Leadership changes occurred in 2025, with Kevin McAleenan becoming CEO, which may enhance government contract opportunities [6] - BigBear.ai reported a net loss of $62 million in Q1 and has total liabilities of $198.5 million, including $100.6 million in long-term debt [7] Group 3: Comparative Analysis - C3.ai has a strong balance sheet with $1 billion in assets and $187.6 million in liabilities, while BigBear.ai's cash position is weaker with $107.6 million [8] - C3.ai's federal government bookings represented only 26% of its revenue in FY 2025, making it less vulnerable to potential budget cuts compared to BigBear.ai, which relies heavily on federal contracts [9] - C3.ai's forward price-to-sales ratio is 6.87, making it relatively cheaper than BigBear.ai's ratio of 9.13, indicating better valuation [11] Group 4: Investment Recommendation - C3.ai is highlighted as a compelling buy due to its strong sales growth, robust balance sheet, lower susceptibility to government policy changes, and attractive valuations, while BigBear.ai is rated as a sell [12]