Artificial intelligence (AI) remains a top investment theme, with investors eager to find the next breakout stock beyond well-known leaders like Nvidia (NVDA). One lesser-known player, BigBear.ai (BBAI), is gaining traction, posting strong double-digit gains this year. The company builds AI-powered software that helps organizations analyze complex data, with a significant portion of revenue coming from government and defense contracts.
BigBear.ai stands out by operating at the crossroads of AI and defense technology. This unique position could make it an attractive option for investors seeking the next Palantir (PLTR), which has surged over 800% in the past two years.
Adding to its appeal, H.C. Wainwright recently set a new Street-high price target of $9 for BigBear.ai, signaling growing confidence in the company's ability to leverage AI demand in national security. With momentum building and a fresh target in place, it’s worth taking a closer look at this underdog AI stock.
About BigBear.ai Stock
Based in Virginia, BigBear.ai specializes in AI-driven decision-making tools that support faster, smarter choices across defense, national security, travel, and enterprise sectors. The company is known for its predictive analytics, making it a trusted partner in complex mission-based environments. BigBear.ai’s market cap is approximately $2.2 billion.
Though not yet a household name like Palantir, BigBear.ai’s recent rally signals growing investor interest. Shares have risen roughly 412% over the past year and added another 70% so far in 2025. For comparison, the S&P 500 Index has gained about 12% over the past year and 6% year-to-date. Most notably, BBAI stock surged 185% in the last three months alone.
A Closer Look at BigBear.ai’s Q1 Financials
BigBear.ai reported its fiscal 2025 first-quarter results on May 1. Revenue increased 5% year-over-year to $34.8 million. While modest, this growth contrasts with the fast acceleration typically expected in the AI sector.
Profitability remains a work in progress. The company cut its net loss by more than half, improving from $0.68 per share a year ago to $0.25. Gross margins edged up slightly to 21.3%, indicating better cost management. The balance sheet strengthened as well, with $58 million of long-term debt paid off and $107.6 million in cash on hand as of March 31, providing financial flexibility to pursue growth.
However, adjusted EBITDA loss widened to $7 million from $1.6 million a year earlier, driven by increased R&D and higher recurring SG&A expenses. On the bright side, BigBear.ai ended Q1 with a $385 million backlog, signaling a robust pipeline. The company expects 2025 revenue between $160 million and $180 million but anticipates a negative adjusted EBITDA in the single-digit millions.
What Do Analysts Expect for BBAI Stock?
Despite mixed early results, H.C. Wainwright raised its price target on BigBear.ai from $6 to a Street-high $9, maintaining a “Buy” rating. The firm pointed to strong price momentum, contract wins, and favorable trends in AI-driven defense and security. They also forecast double-digit revenue growth for fiscal 2026, supported by the large backlog.
Improved financials provide room for potential acquisitions, which could accelerate revenue growth and profitability. Wall Street coverage remains limited but generally optimistic, with a consensus rating of “Moderate Buy.” Among four analysts, two recommend “Strong Buy” and two suggest “Hold.”
Although the stock currently trades above the average analyst price target of $5.83, H.C. Wainwright’s $9 target implies an 18% upside from current levels.
Investors interested in AI stocks with exposure to defense might find BigBear.ai worth watching closely as it builds momentum and positions itself for growth.
Your membership also unlocks:
