Is BigBear.ai Your Ticket to Turning into a Millionaire?

July 2, 2025 icemelon17@gmail.com

BigBear.ai (NYSE: BBAI) is a well-liked synthetic intelligence (AI) inventory decide on account of its pure-play standing within the area. There aren’t many investments which are solely centered on AI, which attracts buyers to those concepts.

BigBear.ai can also be a small firm, with a market cap of round $1.9 billion. It would not take a lot progress to show this right into a a lot bigger enterprise, however is it sufficient to make you a millionaire from a modest funding?

The silhouette of a person looking at a screen displaying data. — Picture supply: Getty Pictures.

For BigBear.ai to make you a millionaire, to illustrate it must ship 100 occasions the returns. This could rework $10,000 into $1 million if it achieves that progress stage.

BigBear.ai focuses on offering AI options, primarily to authorities entities. Though it does not title its shoppers, BigBear.ai generates a good portion of its income from a handful of shoppers, possible totally different authorities departments. In 2024, 52% of income got here from simply 4 clients. That is inherently a problem, as a kind of clients might lower its spending with BigBear.ai and trigger important turmoil throughout the enterprise.

Nevertheless, many corporations thrived with solely having a couple of shoppers as clients, so that is only a threat, not a disqualifier.

Moreover, BigBear.ai appears to be doing fairly properly with a few of its shoppers. Final yr, it was awarded a five-year, $165 million contract to develop the U.S. Military’s International Drive Info Administration-Goal Setting. It is a important improvement, because it generates a median of $33 million in income per yr for BigBear.ai. Contemplating that its complete income over the previous 12 months was solely $160 million, this contract is a big enhance for BigBear.ai.

BBAI Revenue (TTM) Chart — BBAI Income (TTM) knowledge by YCharts

Nevertheless, it must proceed capturing massive contracts to be able to succeed. With President Donald Trump’s crackdown on some ranges of presidency spending, this might show troublesome within the close to future. Consequently, BigBear.ai faces an uphill battle. Nonetheless, if it will possibly seize a couple of contracts right here and there, it has large upside potential, nevertheless it wants to indicate some life within the close to future.

In Q1, BigBear.ai’s income solely rose 5% yr over yr to $34.8 million. Contemplating the importance of AI, this looks like an extremely sluggish progress price. Nevertheless, its backlog grew 30% yr over yr to $385 million, indicating energy in capturing new contracts. BigBear.ai wants to begin recognizing some income from these contracts, as 5% progress will not suffice, particularly when different rivals are delivering considerably larger ranges.

One other extremely acknowledged AI firm that has important publicity to the U.S. authorities is Palantir Applied sciences. Palantir noticed 45% income progress to $373 million in Q1 for its U.S. government-related enterprise, so it is clear that Palantir is each bigger and faster-growing than BigBear.ai within the authorities realm.

If BigBear.ai had been delivering the identical progress price as Palantir with authorities shoppers, I would be much more excited concerning the inventory. However as a result of it is solely rising by 5%, I am extraordinarily skeptical.

One saving grace of BigBear.ai’s inventory is its comparatively low-cost worth.

BBAI PS Ratio Chart — BBAI PS Ratio knowledge by YCharts

At round 11 occasions gross sales, BigBear.ai trades on the low finish of the everyday 10 to twenty occasions gross sales vary that software program corporations are often valued at. Nevertheless, most software program corporations aren’t rising at 5% yr over yr, which is why BigBear.ai’s valuation seems to be deceptively low.

With the present enterprise state, I do not suppose BigBear.ai is a millionaire-maker inventory. If it begins touchdown massive contracts and rising at a fast tempo, I’ll change my stance. However as of proper now, there are far too many higher AI inventory picks on the market than BigBear.ai.

Before you purchase inventory in BigBear.ai, take into account this:

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*Inventory Advisor returns as of June 30, 2025

Keithen Drury has no place in any of the shares talked about. The Motley Idiot has positions in and recommends Palantir Applied sciences. The Motley Idiot has a disclosure coverage.

Is BigBear.ai Your Ticket to Turning into a Millionaire? was initially revealed by The Motley Idiot

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