Kevin McAleenan
BigBear.ai’s shares have tripled over the past year, and are up over 50% this year. Over the past few trading sessions, its shares have risen by a third after its biometric technology was rolled out at Nashville International Airport. Its most recent buyers include Wisconsin’s Kieckhefer Group, which raised its stake by nearly a fifth. Institutional investors backing the provider of software services primarily to government include BlackRock, the Vanguard Group, Goldman Sachs and Morgan Stanely. “Is BigBear the next Palantir,” Motley Fool asked in a recent article, amid a buzz across stock chatrooms.
Started in 1988 in Columbia, Md., BigBear.ai has since moved to McLean, Va. The company makes “decision intelligence” software for supply chains and logistics, enterprise operations, manned-unmanned teaming in autonomous systems, cybersecurity and biometrics. Its customers which include defense, intelligence, Homeland Security, manufacturing, supply chain, and other sectors.
Its contracts include assisting the Department of Defense’s Joint Planning and Execution community with real-time mission threat assessments, and deployment of its biometric facial recognition system VeriScan at numerous airports. A hallmark deal was a $165 million award from the U.S. Army, aimed at modernizing legacy defense systems into an AI-integrated platform.
The company’s proximity to the federal government and involvement in security and defense AI applications reflect the larger trend of growing U.S. government adoption of AI technologies, encouraged by directives from the White House Office of Management and Budget. This governmental push has been a significant growth driver for Palantir Technologies, whose platform approach has yielded a staggering 53% increase in U.S. government revenue year-over-year and a robust 80% gross margin.
BigBear.ai, however, faces scalability challenges that differentiate it from Palantir’s expansive platform model. It primarily creates bespoke AI solutions tailored to individual contracts, rather than a versatile platform deployable across diverse clients. This results in a substantially lower gross margin of around 28% and comparatively sluggish revenue growth — annual sales have grown by less than 9% since 2022.
The second quarter of 2025 revealed notable headwinds, with revenue declining 18% year-over-year to $32.5 million and a significant net loss of $228 million. The management attributed the downturn to reduced volume in some Army-related programs, prompting a downward revision of full-year revenue guidance to between $125 million and $140 million, a decline from $158 million the previous year.
Market analysts currently maintain a “moderate buy” rating on the stock, with an average target price around $6, reflecting cautious optimism. HC Wainwright recently trimmed its price target from $9 to $8, while maintaining its buy rating. BigBear.ai shares have experienced notable volatility, trading between a 12-month low of $1.36 and a high of $10.36.
Analysts’ forecasts remain modest, expecting 2025 revenue in the neighborhood of $133 million, a drop of over 15%, with only a slow recovery anticipated into 2026, projecting $152 million, still below 2024 levels. Historically, BigBear.ai’s revenue has increased from $146 million in 2021 to $158 million in 2024, but this growth fell considerably short of earlier projections that anticipated $550 million by 2024. The company has also faced external pressures including economic headwinds, heightened competition, and the fallout from a major customer’s bankruptcy, factors which have influenced both its operational and financial strategies.
BigBear.ai has sought to stabilize operations by acquiring AI vision firm Pangiam last year, securing additional government contracts and implementing cost-cutting measures. Today, Pangiam co-founder Kevin McAleenan leads BigBear.ai as the CEO. With a market cap exceeding $2.5 billion, and a marked increase in institutional ownership, BigBear.ai undoubtedly has potential but faces significant challenges, too.
