BigBear.ai

BBAI

Market cap $2.66B

Artificial intelligence (AI) will reshape industries for decades, making early positioning in focused AI players critical. Smaller AI companies often offer more upside than megacaps that have already priced in the boom.

BigBear.ai Holdings, Inc. BBAI has enjoyed a sharp rebound over the past six months, rising nearly 36% and outperforming major benchmarks, including the S&P 500, the Zacks Computer and Technology sector and even the Zacks Computers – IT Services industry. With the stock trading around $5.79 (as of Dec. 2) and remaining well above its 200-day moving average, investors are weighing whether the rally still has room to run or if the upside is starting to plateau.

BigBear.ai may benefit from increased government spending on AI for national security. As the leader in servers, Dell is positioned to benefit from growing investment in AI data centers.

BigBear.ai struggled to generate consistent revenue growth in recent years. Its top line fell by 18% last quarter due to lower volumes from government programs.

BigBear.ai stock has been heading higher of late on the back of its acquisition of Ask Sage, a move that has the potential to lift its growth rate. However, BigBear.ai's reliance on government contracts for a significant chunk of its revenue has been a headwind for the business.

BigBear.ai's stock has surged 35% year to date in 2025. The acquisition of AskSage, a generative AI platform, will bring high-margin recurring revenue to BigBear.ai.

BBAI surges as its Ask Sage deal, strong cash position and rising government demand set the stage for a potential revenue rebound.

BigBear.ai Holdings, Inc. BBAI has been facing margin pressures since the start of 2025. The gross margin contracted 240 basis points (bps) to 22.8% year over year and the adjusted EBITDA margin was at a negative of 24.8% (compared with negative 3.8% a year ago) in the first nine months of 2025.

Artificial intelligence continues to reshape the defense landscape, and both emerging innovators and established integrators are competing aggressively for relevance across federal agencies. BigBear.ai Holdings, Inc. BBAI and Leidos Holdings, Inc. LDOS sit at two different ends of this spectrum.

BigBear.ai (BBAI) might move higher on growing optimism about its earnings prospects, which is reflected by its upgrade to a Zacks Rank #2 (Buy).