Bigbear.ai uses artificial intelligence to modernize military platforms.
Company has an increasing role in border and facial recognition safety software used in airports.
He must develop his activities to improve his margins.
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As much artificial intelligence (AI) is a major growth engine for companies in 2025, it also becomes more and more important for American government agencies. The White House management and budget office published two directives in April to support the use of AI in the federal government, including the requirements to follow the use of AI, adopt new technologies and modernize AI governance.
This is a major reason why PALANTOUT Technologies(Nasdaq: PLTr) Had such an incredible race in the past two years. The Artificial Intelligence platform of Palantir (AIP) was a huge success for commercial customers and government agencies. Palantir said $ 426 million in the US government in the second quarter, up 53% compared to a year ago. This is also why some stock observers are optimistic on another AI company with large aspirations in Bigbear.ai(Nyse: bbai).
With a market capitalization of only $ 2 billion, Bigbear.a is only a fraction of the size of Palantir. But if this can approximate the success of Palantir, it could be a huge winner for investors in the coming years.
Is Bigbear.ai Stock a purchase now?
Image source: Getty Images.
Strategically based in a suburbs of Maryland in Washington, DC, Bigbear.ai provides solutions based on artificial intelligence, as well as automatic learning, cloud -based megadroned and cybergenierie products. His work includes the support of the joint community planning and execution community of the Ministry of Defense (JPEC) via his decision-making aid Platform Orion, which uses real-time information and an AI to assess the planning threats and missions.
Another contract through the main digital and artificial intelligence office of the Pentagon will create personalized AI models that will assess information reports in countries that could potentially have a conflict with the United States
Bigbear.ai is also at the forefront of border security, deployment of biometrics which offer real-time facial recognition. Its Veriscan product is used in more than a dozen international airports and more than 60 airlines to check the passengers before flying.
Perhaps its most important contract to date is an award of $ 165 million published last year to help the army transform its inherited systems into an integrated platform supplied by AI.
The scalability of Bigbear.ai – in particular in relation to Palantir – is scalability. While the AIP platform of Palantant is a large tool that can be used in a variety of uses and agencies, Bigbear.ai so far creates specific solutions for each contract. And that has its limits.
Palantant operates at a comfortable gross profitable margin of 80% because it sells a platform that it can deploy anywhere. Because Bigbear builds punctual systems, its profit margin is only 28%.
Bbai brutes delicate margin data by Ycharts
And this manifests in the growth of the income of the two companies. The annual turnover of Palantant has increased by 85% in the past three years, and the company in the second quarter has reached $ 1 billion in quarterly sales for the first time. Bigbear.ai, on the other hand, has only increased annual income by 8.7% since 2022.
Bbai returned (annual) given by ycharts
Bigbear’s second quarter turnover .i was $ 32.5 million, which was a drop of 18% compared to the previous year. And the company declared a net loss for the quarter of $ 228 million. Management blamed the drop in income from the decline in volume on certain army programs and lowered annual directives to income between $ 125 million and 140 million dollars. A year ago, BigBear.ai had $ 158.2 million in income.
Analysts interviewed by Yahoo! Finance expect $ 133.5 million, which would be a decrease of 15.6% compared to a year ago. Next year’s income forecasts are only $ 152 million – still less than 2024.
Bigbear.ai Stock has increased by 11% so far this year, but it has also been quite volatile, down 69% compared to its top of all time. I understand why bullish investors to want Bigbear.ai to capture part of the magic of palantant. But it is a difficult sled. I think it is a red flag that in this environment, when the federal government pushes the AI so strongly, the annual income of BigBear next year should be lower than what it has brought in 2024.
Admittedly, Bigbear.ai could catch a little lightning in a bottle if he can understand how to evolve and improve its margins, increase income and start gaining constant profit. But until then, I see it as a speculative and strategic game. If you are a Bigbear.ai Bull, then it’s a good idea to put only a small percentage of your wallet on speculative actions like this.
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Patrick Sanders has positions in Palantir technologies. The Motley Fool has positions and recommends palantant technologies. The Motley Fool has a policy of disclosure.
Bigbear.ai (bbai) is a purchase? was initially published by the Motley Fool
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