Better Artificial Intelligence Stock: BigBear.ai vs. Nvidia
August 03, 2025 — 02:15 pm EDT
Key Points
- BigBear.ai has gained attention as an AI investment, but Nvidia leads the AI semiconductor market.
- Nvidia shows strong revenue growth and profitability, critical factors for long-term success.
- Investors should carefully evaluate AI stocks rather than assuming any AI-related stock will perform well.
Overview
Artificial intelligence stocks are popular as AI reshapes various industries. However, not all AI stocks are created equal, and some investors may overlook key financial indicators when choosing which companies to back. Two AI-related stocks currently seeing strong market interest are Nvidia (NASDAQ: NVDA) and BigBear.ai (NYSE: BBAI). Examining their fundamentals helps clarify which is the more sound investment.
What’s Happening with Nvidia
Nvidia stands out due to its exceptional growth driven by demand for its AI semiconductors. Its processors power roughly 70% to 95% of data centers worldwide. In fiscal 2025, Nvidia’s total sales jumped 114% to $130.5 billion, while earnings per share surged 147% to $2.94.
The data center segment, fueling this growth, saw revenue climb 142% to $115 billion. This strong performance pushed Nvidia’s stock up 57% over the past year. Despite this rise, its price-to-earnings (P/E) ratio sits at about 56, which is still below the semiconductor industry average of 64.
Looking ahead, Nvidia’s CEO estimates AI will drive $2 trillion in data center spending over the next few years. Several major tech companies plan to invest heavily in AI infrastructure, suggesting Nvidia’s growth potential remains significant.
What’s Happening with BigBear.ai
BigBear.ai focuses on AI data analytics, helping organizations and government agencies make sense of complex data. The company’s stock has soared 323% over the last year, reflecting enthusiasm for AI analytics.
However, BigBear.ai faces challenges. Its revenue growth is modest, with sales up only 5% in Q1 to $34.8 million. The full-year outlook predicts $160 million to $180 million in revenue, representing roughly 7.5% growth. These figures are underwhelming for a company in a growing AI market.
Another concern is customer concentration: over half of BigBear.ai’s revenue comes from just four clients. This dependency poses risk if any major customer reduces business. The company also reported losses of $1.10 per share last year and $0.25 per share in Q1.
BigBear.ai’s price-to-sales ratio is about 11, well above the S&P 500 average of 3, indicating the stock trades at a high premium despite limited revenue growth and lack of profitability.
Verdict: Nvidia Is the Clear Choice
While Nvidia’s stock is not cheap, it offers a better investment profile compared to BigBear.ai. Nvidia delivers strong profitability, rapid revenue growth, and leadership in the AI semiconductor space. In contrast, BigBear.ai’s high valuation, slow sales growth, and unprofitable status make it a riskier option.
For investors seeking exposure to AI, Nvidia presents a more stable and promising opportunity for long-term gains.
Is Now the Right Time to Invest $1,000 in Nvidia?
Before investing, note that some expert analysts have identified other stocks they believe offer stronger potential returns than Nvidia at this stage. It’s worth exploring a range of options to build a diversified portfolio.
For those interested in expanding AI knowledge or skills to better understand this market, several AI courses and resources are available to help investors and professionals stay informed.
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