While the market has focused on the AI-driven rally in Big Tech companies such as Nvidia (NVDA), Microsoft (MSFT), and Alphabet (GOOGL), one hidden gem has quietly outperformed them all.
BigBear.ai (BBAI), a mid-cap artificial intelligence (AI) firm, has emerged as a stealth growth story, outperforming expectations and showing real traction in mission-critical government work, industrial innovation, and defense applications.
So far in 2025, BigBear stock has outperformed major AI benchmarks and large-cap tech names, which is unusual for a mid-cap defense-tech player. The stock has risen 59% year to date, outperforming Nvidia (up 30.6%), Microsoft (up 21%), and Google (up 1.4%). Let’s find out if it is the right time to grab this hidden gem now.
A New Chapter for BigBear.ai
BigBear.ai, led by newly appointed CEO Kevin McAleenan, is positioning itself in the rapidly evolving AI economy.
BigBear.ai reported $34.8 million in first-quarter revenue, up 5% year over year despite a challenging and often unpredictable government contracting landscape. More impressive is the company’s 30% increase in backlog, which now totals $385 million. This expanding order book reflects growing trust in BigBear.ai’s AI-powered solutions for security, logistics, and critical infrastructure.
While analysts focus on headline-making AI chipmakers, BigBear.ai is building a growth story around sticky, long-cycle contracts and mission dependency. During the Q1 earnings call, management stated that BigBear.ai is continuing to push several of its research projects into general availability, including real-world AI solutions such as veriScan, Trueface, Pangiam Threat Detection, and ConductorOS. These products are at the intersection of AI and national security, allowing BigBear.ai to meet the growing demand for automated threat detection, secure identity verification, and intelligent decision-making platforms. This resulted in an increase in R&D spending of $4.2 million in Q1, up from $1.1 million in the year-ago period.
While the company is still unprofitable, its net loss narrowed to $62 million, compared to $127.8 million in the year-ago quarter. BigBear.ai is also working to strengthen its balance sheet, ending the quarter with $107.6 million in cash and equivalents. Furthermore, the company reduced its convertible note debt by $58 million, bringing the remaining principal to $142 million.
BigBear.ai’s recent contract wins have piqued investor interest, resulting in a surge in its stock performance. In Q1, the company won a critical contract for the Department of Defense Joint Staff J35’s Orion Decision Support Platform. The company is also working to strengthen its partnerships with key industry players such as Austal USA in shipbuilding and Smith Detection for global threat detection deployments. McAleenan boasted that the company’s success stems from combining cutting-edge AI with a thorough understanding of government and infrastructure systems. This has helped the company win in areas where many larger companies struggle.
BigBear.ai reaffirmed its revenue guidance for 2025, forecasting $160 million to $180 million, up from $158.2 million in 2024. Adjusted EBITDA could be in the negative single-digit millions. Analysts covering the stock expect revenue growth of 6.1% in 2025, followed by another 12% in 2026.
Looking ahead, management targets three key areas: a strong balance sheet, a healthy and expanding backlog of government and commercial contracts, and relentless innovation. BigBear.ai’s expansion into government, commercial, domestic, and international markets will enable it to generate a diverse revenue stream with recurring, long-term potential.
Is BBAI Stock a Buy, Hold, or Sell on Wall Street?
On Wall Street, overall, BBAI stock is a “Moderate Buy.” Out of the four analysts that cover the stock, two rate it a “Strong Buy,” and two rate it a “Hold.” With the dramatic surge this year, the stock is trading way over its average target price of $5.83. The high price estimate of $9 implies 26% upside from current levels.
The Overlooked Winner in 2025
BigBear.ai may not be a profitable name yet. However, its stock has outperformed many of the well-known Big Tech names in 2025. BigBear.ai, with its strengthened balance sheet, accelerating contract momentum, and leadership laser-focused on profitable execution, could be one of the most compelling under-the-radar AI plays of the decade for investors with a high risk tolerance and long investment horizon.
However, the company is not yet profitable. It would be wise to keep watch to see if BigBear.ai can continue to convert its backlog into profitable growth quickly enough to survive in this highly competitive space.
