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It’s no secret that artificial intelligence (AI) has been one of the hottest investment themes in recent years, with investors always on the lookout for the next breakout player in this fast-evolving space. Sure, giants like Nvidia (NVDA) dominate headlines as well as portfolios. But under-the-radar names like BigBear.ai (BBAI) are starting to turn some heads, too, with BBAI stock posting impressive double-digit gains this year.
The company develops AI-powered software that helps organizations make sense of complex data, with a solid chunk of its revenue coming from government and defense contracts. What makes BigBear.ai particularly intriguing is its unique position at the intersection of two sizzling sectors: AI and defense technology. That combination could make it a standout pick for investors on the hunt for the next Palantir (PLTR), which has skyrocketed a remarkable 810% over the past two years.
In fact, adding to the stock's appeal, H.C. Wainwright just slapped a fresh Street-high price target of $9 on BigBear.ai, signaling rising confidence in the firm's ability to capitalize on AI-fueled demand in national security. So, with BBAI already riding a wave of momentum and a fresh target now in play, let’s take a closer look at this underdog AI stock.
About BigBear.ai Stock
Virginia-based BigBear.ai specializes in AI-driven decision-making tools that power smarter, faster choices across defense, national security, travel, and enterprise. Known for its sharp predictive analytics, the company is a go-to partner in complex and mission-based operating environments. Its market capitalization presently stands at about $2.2 billion.
The company is rapidly drawing investor buzz, with its Palantir-style business model and growing role in AI-driven defense making it hard to ignore. And even though BBAI has a long way to go before it reaches Palantir-level fame, the stock’s explosive rally speaks volumes about the growing investor interest behind it.
Over the past year, shares have soared an eye-popping 412% with no signs of slowing down, adding another 70% so far in 2025 alone. To put that into perspective, the broader S&P 500 Index ($SPX) has gained just 12% over the past one year and is up about 6% year-to-date (YTD). Even more striking, BBAI stock has surged an incredible 185% in just the last three months as investor interest snowballs.
A Closer Look at BigBear.ai’s Q1 Financials
BigBear.ai released its fiscal 2025 first-quarter results on May 1, showing modest progress on the top line and notable improvement on the bottom line. Revenue came in at $34.8 million, representing a 5% year-over-year (YOY) increase. While that may seem decent at first glance, the growth feels underwhelming given the company’s position in the fast-moving, red-hot AI space, where investors have come to expect much faster acceleration.
BigBear.ai may not be profitable yet, but its first-quarter performance showed some promising strides. The company cut its net loss by more than half, with per-share losses improving from $0.68 in the year-ago quarter to $0.25. Gross margin inched up to 21.3%, a slight improvement from 21.1% in the same period last year, hinting at better cost control. More impressively, the company strengthened its balance sheet, slashing long-term debt by $58 million.
With $107.6 million in cash as of March 31, the firm is showing it has the financial flexibility to support its growth ambitions. On the flip side, BigBear.ai posted an adjusted EBITDA loss of $7 million in Q1, worsening sharply from the $1.6 million loss in the same quarter last year. The wider loss was driven by increased R&D spending and higher recurring SG&A costs.
However, it’s also worth highlighting that BigBear.ai wrapped up Q1 with a substantial $385 million backlog, signaling a strong pipeline of future work already in place. For 2025, the company is guiding revenue to land between $160 million and $180 million. On the other hand, management still expects to post a negative adjusted EBITDA in the single-digit millions.
What Do Analysts Expect for BBAI Stock?
Despite a mixed start to fiscal 2025, H.C. Wainwright recently increased its price target on BigBear.ai from $6 to a Street-high $9, while maintaining a “Buy” rating. The research firm cited the stock’s strong price momentum, its outperformance relative to the broader market, and solid contract wins, backed by powerful secular tailwinds in the AI-driven defense and security space.
H.C. Wainwright also pointed to expectations for double-digit revenue growth in fiscal 2026, which it believes are well-supported by BigBear.ai’s sizable $385 million backlog. On top of that, recent improvements to the balance sheet give the company added flexibility to pursue potential acquisitions — moves that could further accelerate both top-line growth and the path to profitability.
While the coverage is limited, Wall Street appears optimistic about BBAI stock, with the consensus rating firmly planted at “Moderate Buy” overall. Of the four analysts offering recommendations, two analysts advise a “Strong Buy” rating while two maintain a “Hold.”
Although the stock currently trades at a premium to its average analyst price target of $5.83, H.C. Wainwright’s Street-high target of $9 suggests that BBAI can still climb 18% from current levels.
