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In the latest trading session, BigBear.ai Holdings, Inc. (BBAI - Free Report) closed at $2.17, marking a -6.87% move from the previous day. The stock trailed the S&P 500, which registered a daily loss of 1.09%. At the same time, the Dow lost 0.34%, and the tech-heavy Nasdaq lost 2.15%.

Prior to today's trading, shares of the company had lost 17.96% lagged the Computer and Technology sector's gain of 1.99% and the S&P 500's gain of 2.44%.

Analysts and investors alike will be keeping a close eye on the performance of BigBear.ai Holdings, Inc. in its upcoming earnings disclosure. The company's earnings report is set to go public on October 27, 2026. On that day, BigBear.ai Holdings, Inc. is projected to report earnings of -$0.05 per share, which would represent year-over-year growth of 28.57%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $38.11 million, up 15% from the year-ago period.

Regarding the entire year, the Zacks Consensus Estimates forecast earnings of -$0.27 per share and revenue of $146.97 million, indicating changes of +67.07% and +15.12%, respectively, compared to the previous year.

Any recent changes to analyst estimates for BigBear.ai Holdings, Inc. should also be noted by investors. These latest adjustments often mirror the shifting dynamics of short-term business patterns. Therefore, positive revisions in estimates convey analysts' confidence in the business performance and profit potential.

Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed an unchanged state. At present, BigBear.ai Holdings, Inc. boasts a Zacks Rank of #3 (Hold).

The Computers - IT Services industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 148, which puts it in the bottom 40% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.

BBAI's growing backlog, AI product launches and $409.8 million in liquidity offer growth potential, but losses, dilution and fierce competition raise concerns.

Key Takeaways BigBear.ai secured over $225M in federal awards since July 2026, sending its shares up 3.9% on the news.More than 25 generative AI awards and two CBP recompetes expand BBAI's presence in critical federal markets.BBAI's Q2 revenues rose 13% to $36.7M, while backlog reached $269.6M, up 9% from year-end 2025. BigBear.ai Holdings, Inc. (BBAI - Free Report) has secured more than $225 million in federal contract awards since July 2026, strengthening its presence across homeland security, defense, intelligence and federal civilian markets. The awards, comprising new contracts and successful recompetes, reinforce the company's position in national security and trade and travel while expanding its government customer base.

Following the news, shares of BBAI gained 3.9% during the trading hours yesterday.

Federal Contract Wins Expand BBAI's Market PresenceBigBear.ai secured more than 25 new generative artificial intelligence (AI) awards across federal agencies, including the Federal Bureau of Investigation (FBI), NASA, the U.S. Coast Guard, the Department of Energy and the Department of Veterans Affairs. Its platforms provide secure access to advanced AI models and agentic tools, including in disconnected and air-gapped environments where data protection is critical.

The company also expanded its defense and intelligence footprint through contracts supporting U.S. Central Command, U.S. Southern Command and classified intelligence customers. These wins highlight its capabilities in delivering specialized AI solutions for mission-critical government operations.

Additionally, BigBear.ai secured two significant recompete awards supporting U.S. Customs and Border Protection (CBP) through separate partnerships with Science Applications International Corporation (SAIC) and Unissant. These contracts reinforce its longstanding relationship with CBP and support the safe movement of travelers and cargo across U.S. borders.

Contract Momentum Supports BBAI's Growth ProspectsThe latest awards build on BigBear.ai's improving operating performance. In the second quarter of 2026, revenues increased 13% year over year to $36.7 million, driven by contributions from Ask Sage's generative AI platforms and products. Gross margin expanded to 32.8% from 25% a year earlier, reflecting a favorable revenue mix.

The company's backlog reached $269.6 million at June 30, 2026, up 9% from year-end 2025. Management also reaffirmed its full-year revenue guidance of $135-$165 million.

Shares of the company have declined 36.9% in the past six months, underperforming the Zacks Computers - IT Services industry’s 5.6% gain. Persistent operating losses, elevated growth-related expenses and uncertainty surrounding government contract conversions remain key concerns. Nonetheless, BigBear.ai continues to strengthen its position across national security and trade and travel markets, supported by new federal contract awards, successful recompetes and international expansion.

Image Source: Zacks Investment Research

BBAI’s Zacks Rank & Key PicksCurrently, BigBear.ai carries a Zacks Rank #3 (Hold).

Here are some better-ranked stocks from the Computer and Technology sector:

NVIDIA Corporation (NVDA - Free Report) presently sports a Zacks Rank #1 (Strong Buy). The company delivered a trailing four-quarter earnings surprise of 5.8%, on average. NVDA stock has gained 14.9% in the past six months. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for NVIDIA’s fiscal 2027 sales and EPS implies an increase of 88% and 93.9%, respectively, from a year ago.

Vicor Corporation (VICR - Free Report) sports a Zacks Rank of #1 at present. The company delivered a trailing four-quarter earnings surprise of 87.9%, on average. Vicor stock has climbed 37.6% in the past six months.

The Zacks Consensus Estimate for Vicor’s 2026 sales and earnings per share (EPS) indicates growth of 41.1% and 56.3%, respectively, from the prior-year levels.

Telos Corporation (TLS - Free Report) flaunts a Zacks Rank of #1 at present. The company delivered a trailing four-quarter earnings surprise of 212.5%, on average. Telos stock has lost 2% in the past six months.

The Zacks Consensus Estimate for Telos’ 2026 sales and EPS indicates growth of 15.8% and 77.8%, respectively, from the prior-year levels.

Bouncing back from an inauspicious start to the week that saw the stock finish 3.8% lower from Friday's close, BigBear.ai (BBAI +3.04%) stock is rising today after the artificial intelligence (AI) company announced it has received several new awards.

As of 12:47 p.m. ET, BigBear.ai stock was up 4.6%, retreating from an earlier rise of 11.7%.

Image source: Getty Images.

BigBear.ai has secured more than 25 contract awards totaling $225 millionHaving achieved numerous successes over the past three months, BigBear.ai announced today that it has won more than 25 contract awards valued at more than $225 million since July. In addition to homeland security, the contract awards stem from defense, intelligence, and federal civilian customers.

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In the press release addressing the contract awards, Kevin McAleenan, BigBear.ai's CEO, stated, "Technology does not translate into capability without operational insight, and these awards come from customers who understand both the depth of our experience and our differentiated technology."

Is BigBear.ai stock a buy on the bullish news?Unsurprisingly, shares rocketed higher on this morning's news -- especially when appreciating the significance of the contract awards. To put it in perspective, it's helpful to note that, in its second-quarter 2026 financial results presentation, BigBear.ai reported a backlog of $269.6 million as of June 30.

While the news is certainly positive, AI investors shouldn't rush in and start a position solely based on the new contract awards. Since the company is unprofitable and fails to generate positive operating cash flow, and these contract awards don't guarantee significant improvement in either metric, BigBear.ai stock is best left to those with higher risk tolerances.

Scott Levine has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

BigBear.ai Holdings, Inc. (BBAI - Free Report) ended the recent trading session at $2.39, demonstrating a -1.24% change from the preceding day's closing price. The stock's change was less than the S&P 500's daily gain of 0.6%. On the other hand, the Dow registered a gain of 0.83%, and the technology-centric Nasdaq increased by 0.64%.

The company's shares have seen a decrease of 14.18% over the last month, not keeping up with the Computer and Technology sector's gain of 4.03% and the S&P 500's gain of 1.34%.

The investment community will be closely monitoring the performance of BigBear.ai Holdings, Inc. in its forthcoming earnings report. In that report, analysts expect BigBear.ai Holdings, Inc. to post earnings of -$0.05 per share. This would mark year-over-year growth of 28.57%. In the meantime, our current consensus estimate forecasts the revenue to be $38.11 million, indicating a 15% growth compared to the corresponding quarter of the prior year.

For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of -$0.27 per share and a revenue of $146.97 million, representing changes of +67.07% and +15.12%, respectively, from the prior year.

Any recent changes to analyst estimates for BigBear.ai Holdings, Inc. should also be noted by investors. Recent revisions tend to reflect the latest near-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the business performance and profit potential.

Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. BigBear.ai Holdings, Inc. currently has a Zacks Rank of #3 (Hold).

The Computers - IT Services industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 70, which puts it in the top 29% of all 250+ industries.

The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.

Are you looking to capitalize on the next wave of the intelligence revolution? Deciding between BigBear.ai (BBAI -0.21%) and Innodata (INOD +1.24%) requires weighing specialized government contracts against rapid private-sector scaling.

BigBear.ai provides predictive analytics and decision-support software primarily for the national security sector. Innodata operates as a data engineering specialist, helping technology giants build and refine large language models. While both inhabit the fast-moving world of artificial intelligence, their financial trajectories and target markets offer distinct paths for investors.

The case for BigBear.aiBigBear.ai sells mission-ready intelligence solutions, including computer vision and predictive analytics, to high-stakes sectors like defense and homeland security. In its latest annual report, filed for the fiscal year ended December 31, 2025, the company highlighted its focus on autonomous systems and cybersecurity. Customer concentration like this adds a layer of risk to the business, as clients representing over 10% of revenue accounted for roughly 51% of total sales in 2025.

In FY 2025, revenue reached nearly $127.7 million, representing a decline of approximately 19.3% compared to the prior year. This drop contributed to a net loss of approximately $293.9 million for the period. The net margin for FY 2025 was roughly -230.2%, indicating that expenses significantly outpaced revenue during this phase of the company's development.

As of its December 2025 balance sheet, the current ratio stands at approximately 1.8x, which compares short-term assets to short-term liabilities to assess liquidity. The debt-to-equity ratio is 0.0x, which compares total debt (including both short-term and long-term borrowings) to shareholder equity. Free cash flow was negative at approximately $46.3 million, which is calculated as cash from operations minus capital expenditures.

The case for InnodataInnodata serves as a critical partner for builders of artificial intelligence, providing the human expertise and data frameworks needed to train advanced systems. The company has successfully pivoted toward the generative AI boom, securing partnerships with several of the world's largest technology firms. One customer in the Digital Data Solutions segment accounted for approximately 58% of total revenue in 2025, a concentration that adds a layer of risk to the business. This pivot has helped the firm find its footing among best small cap tech stocks in the data engineering space.

In FY 2025, revenue reached close to $251.7 million, a significant increase of approximately 47.6% over the previous fiscal year. This growth led to net income of roughly $32.2 million for the same period. The net margin improved to approximately 12.8%, showing that the company is effectively translating its top-line growth into bottom-line profits.

As of its December 2025 balance sheet, the current ratio is approximately 2.7x, indicating a solid cushion for meeting near-term obligations. Similar to its peer, the debt-to-equity ratio is 0.0x, showing a balance sheet where total debt is balanced against equity. Free cash flow was positive at nearly $35.6 million, though note that stock-based compensation represented roughly 23.8% of operating cash flow, which inflates reported cash generation since SBC is a non-cash expense added back in the cash flow statement.

Risk profile comparisonBigBear.ai faces material risks including a class action lawsuit and the requirement to restate multiple years of financial statements, resulting in delays in regulatory filings. The company has significant revenue concentration and is dependent on government contracts that are often subject to unilateral termination. Future growth is contingent on successful acquisitions and the ability to compete against large technology firms and defense contractors, such as Microsoft (MSFT +2.69%).

Innodata faces significant risks from its high customer concentration, as the loss or reduced volume from its primary Digital Data Solutions customer would materially harm its financial results. The company is subject to ongoing litigation, including a putative securities class action lawsuit filed in 2024 concerning its AI technology and services. Additional risks include vulnerability to wage inflation in its primary offshore operating locations and competition from larger entities like Accenture (ACN -0.39%) and Cognizant Technology Solutions (CTSH -0.87%).

Valuation comparisonInnodata currently appears to be the more attractive value based on its P/S ratio, though investors should note BigBear.ai lacks Forward P/E data due to negative future earnings estimates.

MetricBigBear.aiInnodataForward P/EN/A51.4xP/S ratio9.1x6.5xValuation metrics include sourcing from Financial Modeling Prep (FMP) and may differ from other data providers.

I'd go with Innodata. BigBear.ai has gained plenty of attention with its national security contracts, but Innodata has spent 12 consecutive quarters growing consistently and becoming more profitable along the way. The stock has had a remarkable run this year, surging dramatically after a blowout Q1 earnings report in May that crushed analyst expectations and announced a major new big tech customer.

BigBear.ai is showing encouraging signs after a difficult stretch. Revenue grew in the most recent quarter and the company won over 20 new contracts. Its government contracts are sticky and hard for competitors to displace, a major strength. But a single customer still accounts for roughly half of BigBear's total revenue, which is a concentration risk that is hard to plan around, regardless of recent momentum.

Innodata's customer base is more diversified and its profitability is improving quarter after quarter. For me, this consistent execution and improving business quality make it the more comfortable pick right now.

AI continues to transform the corporate landscape, but choosing the right stock remains challenging given the sheer number of options. Should you bet on BigBear.ai (BBAI -3.59%) or the infrastructure-focused Nebius Group (NBIS -7.35%)?

These companies target the AI market from opposite sides. BigBear.ai provides software solutions primarily for defense and government intelligence, while Nebius Group builds the cloud infrastructure required to train advanced models. While they both operate in the technology sector, their financial profiles suggest very different paths for investors.

The case for BigBear.aiBigBear.ai specializes in decision-intelligence and autonomous software for the defense and intelligence sectors. The company typically uses a prototype-first model to secure long-term government sales, deploying minimally viable products before moving to full-scale arrangements.

Customer concentration like this adds a layer of risk to the business, as roughly 51% of 2025 revenue came from customers contributing more than 10% of total sales. These contracts often allow for termination for convenience, which can create volatility in future revenue streams.

In 2025, revenue reached nearly $128 million, a 19% decline from the prior year. The company reported a net loss of approximately $294 million for the same period. This performance continued a trend of net losses seen in previous fiscal years, despite the high demand for analytics among tech stocks.

As of its December 2025 balance sheet, the debt-to-equity ratio was nearly 0.2x, indicating that total debt is negligible relative to shareholders' equity. The current ratio, which measures the ability to cover short-term debts with current assets, was roughly 1.8x.

As of Q2 2026, trailing-12-month free cash flow was negative $73 million, representing cash flow from operations minus capital expenditures. Because the company is not yet generating positive cash from its operations, it must rely on existing liquidity to fund its growth initiatives.

The case for NebiusNebius operates as an AI cloud infrastructure provider, building the full-stack environments required for model training and deployment. The company maintains a global footprint with data center hubs across Europe and the United States to serve AI builders.

Its platform targets enterprises in healthcare, robotics, and financial services. By offering end-to-end infrastructure, it aims to capture the high capital investment currently flowing into the AI sector.

In 2025, revenue reached nearly $530 million, marking a significant increase of approximately 479% over the previous year. The company reported net income of approximately $82 million, achieving a positive net margin of roughly 15%. This growth trajectory highlights the rapid expansion of its cloud services as enterprises rush to secure computing power for AI workloads. This leap in revenue demonstrates the intense demand for training capacity in the global market.

As of its December 2025 balance sheet, the current ratio was approximately 3.1x, suggesting a strong ability to meet short-term obligations. The debt-to-equity ratio was nearly 1.1x, comparing the company's total debt to its shareholders' equity.

As of Q2 2026, TTM free cash flow was approximately negative $5.9 billion, reflecting the large capital expenditures needed to purchase GPUs and other hardware to expand its data center infrastructure.

Risk profile comparisonBigBear.ai faces significant risks, including dependency on the U.S. public sector, which makes it vulnerable to budget deficits and procurement delays. Furthermore, it faces intense competition from massive system integrators and leading tech companies.

Nebius Group operates in an extremely capital-intensive industry and must compete with the world's largest cloud providers. Its massive negative free cash flow indicates the high cost of building and maintaining global data centers. Because it faces competition from other hyperscalers, the company must maintain a rapid pace of innovation. Investors should also consider the execution risks involved in scaling infrastructure across multiple international jurisdictions.

Valuation comparisonNebius commands a much higher sales multiple than BigBear.ai, reflecting its explosive revenue growth despite significant capital spending requirements.

MetricBigBear.aiNebius Group N.V.Forward P/En/a33.6xP/S ratio9.1x42.0xThe P/S ratio measures a company's market value against its sales over the past twelve months. The Forward P/E compares the stock price to future earnings estimates.

Valuation metrics include those sourced from Financial Modeling Prep (FMP) and may differ from those of other data providers.

I would buy Nebius. Despite its negative free cash flow, it is growing revenues and reporting a profit on a GAAP basis. BigBear.ai has reported inconsistent financial results and continues to report large losses on the bottom line. This reflects a more difficult path to growth for BigBear in winning government contracts.

Importantly, Nebius is pursuing a much bigger market than BigBear.ai. The addressable market for GPU cloud infrastructure is estimated to be $1 trillion. Nebius is not going to capture all of it. Still, if it can capture just 10% of that opportunity, it could generate $100 billion in revenue and deliver significant returns for investors.

BigBear.ai aims to make strategic acquisitions to expand, but Nebius doesn't have to do so. It is seeing higher prices per megawatt of data center capacity, indicating a solid competitive position and pricing power.

Overall, I would buy the stock that is posting consistently high revenue growth and building infrastructure for the AI-driven economy. Nebius has a much higher ceiling to generate wealth-building returns over the long term.

BigBear.ai Today

$2.48 -0.04 (-1.39%)

As of 09:39 AM Eastern

This is a fair market value price provided by Massive. Learn more.

$2.48▼

$9.39$5.00

BigBear.ai Holdings NASDAQ: BBAI is among the most shorted stocks on Wall Street, highlighting its potential to deliver significant gains in the coming months. As counterintuitive as it sounds, high short interest is offset by technical signals, fundamental improvements, and potential catalysts that could drive short covering and, more specifically, a short squeeze.

While not technically a low-float stock, the 31% short interest paints a different picture; nearly one-third of all shares have been sold short, a massive load to cover in a short time. Time is of the essence, as the days-to-cover is also quite high, about 10 days as of early October, which means any sudden liquidity event can lead to rapid covering and a massive surge in the share price.

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The technical signals suggest this market has been pushed to its tipping point. While downward pressure may continue, MACD and stochastic reveal deeply oversold conditions and divergences pointing to an exhausted market. Bad news is a risk, as it may trigger full retail capitulation, but the trends suggest good news is on the way. As it stands, the market is still above critical support, set in early 2025, ready to rebound at the drop of a headline.

BigBear.ai Has Big Catalysts AheadBigBear.ai catalysts include deeper penetration into government markets and integration with defense, intelligence, and border security agencies. Upcoming results are expected to reflect the monetization of last year’s acquisitions, including AskSage, which positioned it with over 150 generative AI models geared for defense applications. Recent highlights include 20 new contract wins, a 9% H1 backlog increase, and expanding margins driven by operational optimization and scale leverage. Gross margin expanded by 780 basis points in Q2 and is expected to continue expanding, underpinned by AskSage.

Investors shouldn’t misinterpret the threat of dilution. While dilution remains a threat, the company has no immediate capital need, a large backlog, and improving profitability to help sustain its balance sheet. The $410 million in cash and marketable investments reported at the end of Q2 is sufficient to sustain operations for nearly four years at the Q2 burn pace, and there is another factor to consider. Last year’s nearly 60% share count increase resulted in nearly zero debt, alongside strategic acquisitions that have driven growth today. The worst-case scenario is that the company utilizes another funding round to pay for another strategic acquisition.

In this scenario, the timeline to profitability is accelerating. The transition to profitability is currently expected before the decade ends, potentially as soon as early 2028, but may come sooner, as the company aggressively invests in market share. Investments include expanding go-to-market teams and channels: scaling high-margin AI services such as AskSage and CargoSeer, computer vision for port analytics, and acquisitions. AskSage, for example, brought a secure ecosystem with high-level government clearances, thousands of active contracts, and an equally large number of cross-selling opportunities.

Analyst and Institutional Flows Are a Signal to Watch ForBigBear.ai Stock Forecast Today12-Month Stock Price Forecast:
$5.00
99.60% Upside

Hold
Based on 3 Analyst Ratings

Current Price$2.51High Forecast$6.00Average Forecast$5.00Low Forecast$4.00BigBear.ai Stock Forecast Details

Analysts and institutions will be the signal that longer-term traders and investors should watch. The group shows little interest today, with only three analysts covering and less than 8% institutional ownership, but that can change quickly with good news. Signs of sustainability, including more contracts, clients, and penetration, will improve revenue visibility in what is otherwise an attractive sector. Institutions can easily overlook the lumpiness of government-derived revenue in favor of visibility and cash flow, the ultimate trigger for this market.

Some market participants get BBAI wrong: it is not a traditional software-as-a-service vendor like Palantir NASDAQ: PLTR, its most common comparison. BigBear.ai is instead a government infrastructure provider undergoing a multi-year transition. The transition includes a quality shift, with the company actively shedding its legacy business in favor of newer, higher-margin contracts tied to recurring software revenue, as reflected in the Q2 results. With the backlog growing and the balance sheet well-funded, it has a clear runway to convert contracts into revenue and cash flow in the coming year and to sustain growth the year after.

The sleeper catalyst is BBAI’s ConductorOS, an AI-based orchestration and sensor-fusion platform. It acts as an orchestration layer, enabling real-time communication between disparate compute hardware, such as drones and unmanned tactical devices. It places BBAI firmly in the realm of scalable platforms with the power to capture high-margin wins with negligible increases in underlying costs. Tailwinds include the One Big Beautiful Bill, which includes funding for border security and autonomous technology, the Pentagon’s push to accelerate AI adoption, and accelerating global drone demand, all of which tie into BBAI’s core technologies.

Should You Invest $1,000 in BigBear.ai Right Now?Before you consider BigBear.ai, you'll want to hear this.

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BigBear.ai (BBAI -0.31%) and SoundHound AI (SOUN +1.46%) are both carving out niches in the rapidly evolving intelligence market, but they approach the opportunity from entirely different operational and financial angles.

BigBear.ai offers decision intelligence tools that help governments and corporations interpret complex data, while SoundHound AI focuses on conversational voice technology for consumer-facing brands. This comparison explores which company offers a more compelling risk-to-reward profile for your 2026 portfolio as they navigate losses and expansion.

The case for BigBear.aiBigBear.ai provides AI-powered decision intelligence solutions that assist organizations in making complex data-driven choices. The company primarily targets global supply chains, autonomous systems, and cybersecurity markets. Among tech stocks serving the defense sector, it counts the U.S. Department of Defense and various federal agencies as key clients. According to its latest annual report filed in early 2026, the company also serves organizations in manufacturing, warehousing, and healthcare. One customer accounted for 51% of total revenue as of December 31, 2025. Customer concentration like this adds a layer of risk to the business because the loss of that single contract could significantly impact the bottom line.

In FY 2025, revenue reached nearly $127.7 million, representing a year-over-year decline of approximately 19.3% from the $158.2 million reported in the prior year. The company reported a net loss of roughly $293.9 million for the period, resulting in a negative net margin of approximately 230.2%. This trend suggests that the business is still working toward a sustainable path to profitability while managing a decline in top-line results compared to previous years.

As of its December 2025 balance sheet, the debt-to-equity ratio was 0.0x, meaning total liabilities do not exceed shareholder equity. The current ratio, which measures the ability to pay short-term debts with current assets, was approximately 1.8x. Free cash flow, which is cash from operations minus capital expenditures, was a loss of nearly $46.3 million. The P/S ratio for the company sits at 9.7x, comparing its market value to its sales over the past twelve months.

The case for SoundHound AISoundHound AI focuses on voice and agentic AI solutions designed to create natural conversational experiences. Its technology is used in phones, kiosks, smart devices, drive-thrus, and in-vehicle systems. The company serves a variety of industries, including restaurants, automotive, and customer service. Following its September 2026 acquisition of LivePerson, the company significantly expanded its omnichannel conversational platform and global customer service footprint. The customer base includes major brands such as Stellantis and Chipotle. As of its December 31, 2025 reporting, no single customer accounted for more than 10% of total revenue.

In FY 2025, revenue reached nearly $168.9 million, which is an increase of approximately 99.4% over the previous fiscal year. This sharp rise reflects both organic growth and the impact of recent business expansions. Despite the top-line growth, the company reported a net loss of close to $14.0 million for the period, yielding a negative net margin of roughly 8.3%. This net loss is a significant improvement from the previous year, suggesting the company is narrowing its gap between spending and income.

As of its December 2025 balance sheet, the company maintained a current ratio of roughly 4.6x, indicating it has ample liquid assets to cover near-term obligations. The debt-to-equity ratio was approximately 0.0x, showing that total liabilities are low relative to equity. Free cash flow was a loss of nearly $103.1 million for the year. This reflects the significant capital being reinvested into the business to support its rapid growth and the integration of new technologies following its recent acquisition.

Risk profile comparisonBigBear.ai faces risks from its heavy revenue concentration with a limited number of government customers. The company also disclosed material weaknesses in its internal controls over financial reporting, which have led to restatements and regulatory delays. Furthermore, it deals with potential losses from fixed-price government contracts that may be impacted by inflationary cost overruns. Ongoing class action litigation regarding its accounting practices adds another layer of financial uncertainty alongside non-cash goodwill impairment charges.

SoundHound AI continues to report significant net losses and negative operating cash flows. The company must also navigate the operational risks of integrating the LivePerson acquisition, which involves merging complex infrastructure and systems. It faces intense competition from large technology companies like Microsoft (MSFT +1.62%) and Amazon (AMZN +0.04%) that have greater financial resources. Additionally, the firm is subject to shareholder litigation and regulatory scrutiny regarding its governance and internal control effectiveness.

Valuation comparisonSoundHound AI carries a higher P/S ratio than BigBear.ai, though neither company currently has a Forward P/E based on current future earnings estimates.

MetricBigBear.aiSoundHound AIForward P/EN/AN/AP/S ratio9.7x12.5xValuation metrics include sourcing from Financial Modeling Prep (FMP) and may differ from other data providers.

I'd go with SoundHound AI, though this is a close call between two early-stage, unprofitable companies asking investors to be patient.

SoundHound has built a growing base of enterprise customers across healthcare, automotive, and restaurant industries. Revenue grew at a strong double-digit rate in the most recent quarter, and the company raised its full-year outlook. Its voice AI platform continues to land new contracts. The company is making consistent commercial progress at an early stage.

BigBear.ai is carving out a defensible niche in AI-powered national security software. Its government contracts are sticky, gross margins are improving, and the backlog is growing. But revenue declined last year, losses are widening, and a single customer accounts for roughly half of total revenue. It's a concentration risk that is hard to overlook.

SoundHound has a more diversified customer base and a clearer commercial momentum heading into the rest of the year. For a patient investor comfortable with early-stage risk, that gives it a modest edge between these two speculative bets.

Every artificial intelligence investing conversation these days seems to circle back to the same handful of trillion-dollar names that have already had their monster runs. That's understandable, but it also means the market isn't putting as much focus on smaller companies like Innodata (INOD -1.91%) and BigBear.ai (BBAI -3.65%) as they warrant. And those two just posted some of the clearest evidence yet that AI spending is reaching past the chipmakers and into the businesses that support them.

Both of these tickers are volatile, with bottom lines hovering between unprofitable and barely profitable, and they're nowhere near guaranteed to work out. But both also just delivered real, company-reported numbers that argue for investors taking a longer look.

Image source: Getty Images.

1. Innodata is turning a services business into a platform Innodata has spent years doing the unglamorous work of preparing and labeling data that large language models learn from, selling that work to big tech customers. In the second quarter, the company reported revenue of $92.1 million, up 58% from a year earlier, with adjusted earnings up 92%.

The more interesting shift is what Innodata is doing with that cash. Outgoing CEO Jack Abuhoff, who transitioned to executive chairman at the end of September as President Rahul Singhal took over as CEO, said the company closed its first engagement on a new self-serve data platform and had 15 more companies evaluating it, alongside talks with two hyperscalers about reselling access to it. That's a meaningful change in the business model: Instead of just renting out people and processes, Innodata is trying to sell software that its customers can use themselves. That type of business tends to carry better margins and stickier revenues.

It's not a finished story. A single customer still provided 37% of its revenue last quarter -- though that was down from 56% the quarter before -- and shares remain more than 45% below their 52-week high near $125 even after that record quarter, suggesting the market wants to see the platform business scale before it pays up for it.

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2. BigBear.ai just landed a contract that the stock hasn't priced in yet BigBear.ai (BBAI -3.65%) sells AI-powered analytics software to the U.S. government, and in April, it won a 10-year contract with the U.S. Air Force worth up to $900 million. Specifically, it's an "indefinite delivery, indefinite quantity" contract, government shorthand for a deal with a pre-approved ceiling that lets the Air Force award task orders to BigBear.ai without running a new competition each time. It doesn't guarantee $900 million in revenue, but it does mean BigBear.ai is now pre-qualified to bid quickly across a decade of Air Force AI work, rather than starting from scratch on every opportunity.

According to CEO Kevin McAleenan, the company's acquisition of generative AI platform Ask Sage last year will broaden its reach across national security customers, and BigBear.ai expanded that platform's capabilities for Department of Defense missions in July. Yet the stock trades near its 52-week low of $2.60, down from a high above $9, even with the backlog growing. BigBear.ai is also still deeply unprofitable, so the government pipeline will have to actually convert into cash before it means much.

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What investors should do with this Neither of these stocks should be picked as core portfolio holdings. Both are speculative, and for them to deliver 10x returns would require years of close to flawless execution from companies that are still small enough to be knocked off course by one lost customer or one delayed contract.

But if I'm putting speculative money into AI stocks at all, I'd rather put it into players like BigBear.ai. and Innodata than into stocks that have already experienced 10x run-ups premised on the assumption that everything will go right for them. When a stock has years of hoped-for future success baked into its share price, even good news can fail to lift it, and any business stumbles get punished hard. Innodata and BigBear.ai are in the opposite situation right now: Their businesses are producing real, verifiable progress, but their stocks are beaten down and don't reflect the good news yet.

Key Takeaways SOUN posted 45% Q2 revenue growth to $61.9M as gross margin rose 610 basis points to 45.1%.OASYS, LivePerson and OASYS Edge broaden SOUN's reach across enterprises, vehicles and smart devices.BBAI Q2 revenues rose 13% to $36.7M, but adjusted EBITDA loss widened as SG&A and R&D spending rose. SoundHound AI (SOUN - Free Report) and BigBear.ai Holdings (BBAI - Free Report) offer investors two very different ways to gain exposure to artificial intelligence. SoundHound is building voice, conversational and agentic AI solutions across enterprises, automobiles, restaurants and financial services, while BigBear.ai focuses on mission-ready AI for defense, national security, logistics and other secure environments.

Both remain high-growth, loss-making AI companies and both have suffered substantial share-price declines in 2026. However, their latest operating trends are diverging, particularly in revenue growth, earnings-estimate revisions and product expansion.

Let's dive deep and closely compare the fundamentals of the two stocks to determine which one is a better investment now.

The Case for SoundHound StockSoundHound's growth profile strengthened considerably in the second quarter. Revenues jumped 45% year over year to a record $61.9 million, while GAAP gross margin expanded 610 basis points to 45.1%. Adjusted EBITDA loss improved to $9.6 million from $14.3 million a year earlier, showing that rapid top-line expansion is beginning to generate operating leverage.

OASYS, SoundHound's self-learning agentic AI platform, is becoming an important growth driver. The company is gaining traction across healthcare, banking, automotive and restaurants, while partnerships are expanding its distribution. Its opportunities also extend beyond cloud-based enterprise AI. On Sept. 24, SoundHound introduced OASYS Edge, allowing LLM-powered voice agents to operate directly on vehicles and smart devices, including without continuous connectivity.

The recently completed LivePerson acquisition materially broadens this opportunity. SoundHound now reaches customers that include 25 of the Fortune 100 and has a portfolio of more than 750 patents. Integrating LivePerson's digital-messaging infrastructure with OASYS creates an omnichannel offering spanning voice, web, mobile, SMS and social channels. SoundHound also said the combined existing customer base could represent more than $500 million in future revenues, although realizing that opportunity will depend on successful integration and cross-selling.

Still, SoundHound remains unprofitable. The company reported a $42.8 million GAAP net loss in the second quarter, and integrating LivePerson adds execution risk. Its rapid acquisition-driven expansion also makes cost discipline and progress toward sustainable profitability important factors to watch.

The Case for BigBear.ai StockBigBear.ai's investment case centers on specialized AI for defense, intelligence, border security, transportation and other mission-critical applications. This gives the company exposure to rising demand for secure AI systems, where technical requirements and security clearances can create meaningful barriers to entry.

Second-quarter revenues increased 13% year over year to $36.7 million, helped by Ask Sage's generative AI products. Gross margin expanded substantially to 32.8% from 25%, while backlog increased 9% from year-end 2025 to $269.6 million. BigBear.ai also ended June with $409.8 million in available cash and investments and maintained its 2026 revenue outlook of $135-$165 million.

Operational momentum is visible as well. BigBear.ai secured more than 20 new contracts during the second quarter, with individual values reaching $5 million, while its technology portfolio is expanding across cargo inspection, generative AI and drone-swarm orchestration. Its financial flexibility could also support additional technology acquisitions.

However, profitability remains a concern. Adjusted EBITDA loss widened to $11.6 million from $8.5 million as higher SG&A and R&D spending offset gross-margin improvements.

BigBear.ai also has substantial exposure to government customers, making contract timing, appropriations and procurement decisions important sources of volatility.

Share-Price Trends Show Pressure Across Both StocksShares of SoundHound and BigBear.ai plunged 39.3% and 48.1% year to date (YTD), respectively. Both have therefore underperformed the Zacks Computers – IT Services industry's 17.4% decline by a wide margin. The contrast is even sharper against the broader Zacks Computer and Technology sector's 22.7% advance and the S&P 500's 12.6% gain.

SOUN vs BBAI Price Performance (YTD)

Image Source: Zacks Investment Research

Although both remain volatile AI plays, SoundHound's smaller YTD decline gives it the relative performance advantage. U.S.-listed AI peers such as Palantir Technologies (PLTR - Free Report) and C3.ai (AI - Free Report) also provide useful reference points when assessing investor appetite for high-growth AI software companies.

Valuations Require Growth to DeliverOn a forward 12-month price-to-sales basis, SoundHound trades at 9.6X compared with 8.42X for BigBear.ai and 11.57X for the Computers - IT Services industry.

SOUN vs BBAI Valuation (P/S F12M)

Image Source: Zacks Investment Research

BigBear.ai is therefore cheaper, but its discount must be viewed alongside materially slower expected revenue growth. SoundHound's higher multiple looks more defensible if OASYS, LivePerson cross-selling and its expanding automotive and enterprise footprint sustain the current growth trajectory. Yet the valuation also makes SoundHound more sensitive to any slowdown in revenue or profitability progress.

Estimate Momentum Creates a Major DivideAnalyst revisions favor SoundHound. Over the past 60 days, the Zacks Consensus Estimate for 2026 loss narrowed to 19 cents per share from 23 cents, while the same for 2027 loss improved to 14 cents from 16 cents. Revenues are projected to rise 41.6% in 2026 and another 22.9% in 2027 to $293.9 million.

SOUN EPS Estimate Revision Trend

Image Source: Zacks Investment Research

For BigBear.ai, estimates have moved in the opposite direction. The projected 2026 loss widened to 27 cents from 25 cents, while the 2027 loss estimate increased to 16 cents from 14 cents. Revenue growth is expected to be 15.1% in 2026 and 11.5% in 2027.

BBAI EPS Estimate Revision Trend

Image Source: Zacks Investment Research

Which Stock Has the Stronger Upside Setup?SoundHound appears to offer the better upside potential at present. Its faster revenue growth, improving profitability metrics, favorable estimate revisions, OASYS momentum and expanded LivePerson footprint outweigh its somewhat higher valuation and integration risks. The recent OASYS Edge launch adds another potential growth avenue for SoundHound — currently carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

BigBear.ai — currently carrying a Zacks Rank #4 (Sell) — has attractive defense-AI exposure, a sizable cash position and improving gross margins, but slower expected growth, deteriorating EPS estimates and a worsening adjusted EBITDA loss weaken its near-term setup.

The artificial intelligence gold rush has shifted toward niche hardware and decision intelligence software. Investors now face a choice between BigBear.ai (BBAI +0.00%) and Rigetti Computing (RGTI +0.97%) for high-risk, high-reward exposure.

BigBear.ai focuses on decision intelligence, helping government and commercial clients navigate complex logistics via AI. Rigetti Computing operates at the bleeding edge of quantum hardware, developing processors intended to solve problems traditional computers cannot. Both companies are early-stage players in the technology sector, attracting investors looking for disruptive growth.

The case for BigBear.aiBigBear.ai is a mission-ready AI company that provides decision intelligence and AI-powered solutions, positioning it among speculative tech stocks. The firm focuses on global supply chains and cybersecurity for both commercial and government customers. Customer concentration adds a layer of risk to the business, as 51% of revenue in 2025 came from customers contributing over 10% each. The company is using a $100 million equity offering to pursue acquisitions and expand its technology portfolio.

In FY 2025, revenue reached nearly $127.7 million, falling roughly 19.3% year over year. The company reported a net loss of approximately $293.9 million for the period, compared to a $295.5 million net loss in 2024. This trend shows that while losses are narrowing slightly, the company faces a significant negative net margin as it tries to scale its software solutions. The top-line decline suggests that securing and expanding government contracts remains a hurdle for consistent growth.

As of its December 2025 balance sheet, the debt-to-equity ratio was 0.0x, meaning total debt does not exceed shareholder equity. The current ratio stands at roughly 1.8x, suggesting the ability to pay short-term obligations with current assets. Free cash flow, which is cash from operations minus capital expenditures, was negative $46.3 million. This negative figure highlights that the company is currently consuming cash to fund its growth and acquisition initiatives.

The case for Rigetti ComputingRigetti Computing builds full-stack quantum computers, including superconducting processors and cloud services. Its applications span drug discovery and logistics for government, academic, and commercial clients. In its latest annual report, filed for FY 2025, the company noted that U.S. government entities accounted for nearly 90.2% of its total revenue. It maintains distribution partnerships with cloud giants Amazon (AMZN +0.12%) and Microsoft (MSFT +3.66%). A major collaboration with Quanta also focuses on developing quantum computing components.

In FY 2025, revenue reached nearly $7.1 million, which is a decline of roughly 34.3% from the prior year. The company reported a net loss of approximately $216.2 million, which widened from a $201.0 million net loss in 2024. These figures reflect the early-stage nature of the quantum computing industry, where research and development costs far exceed current sales. The net margin of approximately negative 3,050.4% highlights the significant gap between the company's early revenue and its operational spending.

As of its December 2025 balance sheet, the debt-to-equity ratio was 0.0x, indicating that the firm has no total debt relative to its equity. The current ratio was approximately 37.4x, which suggests a very high level of liquidity to meet short-term liabilities. Free cash flow, calculating cash from operations minus capital expenditures, was negative $77.2 million. This negative cash flow indicates the high capital intensity required to build and maintain sophisticated quantum hardware and fabrication facilities.

Risk profile comparisonBigBear.ai faces significant risks, particularly its heavy reliance on government and public sector customers whose contracts can be terminated for convenience. The company is also managing a material class action lawsuit related to previous accounting errors and mandatory financial statement restatements. Integration of its artificial intelligence technologies also poses operational hurdles. Furthermore, the company depends on third-party cloud infrastructure and must compete with massive, well-capitalized defense firms that possess larger research budgets.

Rigetti Computing faces substantial technical risks as it attempts to achieve quantum advantage, a goal with no guarantee of success. The company is dealing with a class action lawsuit and a history of significant net losses and accumulated deficits. It is highly dependent on a small number of government customers and public cloud providers such as Amazon and Microsoft. Additionally, the business requires heavy research and development spending for its fabrication facility upgrades and intellectual property protection.

Valuation comparisonBigBear.ai appears cheaper based on its P/S ratio, which compares market capitalization to sales over the past twelve months.

MetricBigBear.aiRigetti ComputingForward P/EN/AN/AP/S ratio10.2x418.1xValuation metrics sourced from Financial Modeling Prep (FMP) and may differ from other data providers.

I'd go with BigBear.ai. Both companies are early-stage, unprofitable, and asking investors to bet on technologies that are still proving themselves, so this is not a comfortable pick either way.

That said, BigBear.ai has something Rigetti is still working toward: revenue from customers that are difficult to displace. Its AI-powered decision intelligence platform is embedded in national security workflows, and the backlog keeps growing. The path to profitability is long, but the direction is encouraging.

Rigetti is one of the few companies that has actually built and deployed quantum computing hardware at a scale that serious researchers are paying to access. A CHIPS Act funding letter of intent adds a layer of government validation. But revenue remains tiny, and the gap between bookings momentum and actual recognized revenue is something investors need to understand before buying in. Quantum computing's commercial moment is getting closer, but it has not fully arrived yet.

If I'm choosing between two speculative early-stage companies, I want to own the one already generating revenue from customers that are hard to walk away from. That's the more grounded starting point for a patient investor.

BigBear.ai Holdings, Inc. (BBAI - Free Report) ended the recent trading session at $2.80, demonstrating a -1.41% change from the preceding day's closing price. This move lagged the S&P 500's daily loss of 0.03%. On the other hand, the Dow registered a loss of 0.31%, and the technology-centric Nasdaq increased by 0.01%.

The company's stock has dropped by 6.89% in the past month, falling short of the Computer and Technology sector's gain of 5.26% and the S&P 500's gain of 0.53%.

The upcoming earnings release of BigBear.ai Holdings, Inc. will be of great interest to investors. In that report, analysts expect BigBear.ai Holdings, Inc. to post earnings of -$0.05 per share. This would mark year-over-year growth of 28.57%. At the same time, our most recent consensus estimate is projecting a revenue of $38.11 million, reflecting a 15% rise from the equivalent quarter last year.

For the annual period, the Zacks Consensus Estimates anticipate earnings of -$0.27 per share and a revenue of $146.97 million, signifying shifts of +67.07% and +15.12%, respectively, from the last year.

It's also important for investors to be aware of any recent modifications to analyst estimates for BigBear.ai Holdings, Inc. Such recent modifications usually signify the changing landscape of near-term business trends. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the business health and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has remained steady. BigBear.ai Holdings, Inc. is currently a Zacks Rank #4 (Sell).

The Computers - IT Services industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 94, which puts it in the top 39% of all 250+ industries.

The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow BBAI in the coming trading sessions, be sure to utilize Zacks.com.

Key Takeaways BigBear.ai lifted Q2 revenues 13% and backlog to $270 million as it won over 20 new contracts.CargoSeer and ConductorOS are broadening BigBear.ai's reach into commercial and autonomous-system markets.BigBear.ai posted a wider adjusted EBITDA loss as it increased spending on sales, go-to-market and R&D. BigBear.ai Holdings, Inc. (BBAI - Free Report) is seeking to expand its position in mission-critical artificial intelligence as demand rises for secure, specialized AI across defense, security, trade and travel.

In the second quarter of 2026, revenues increased 13% year over year to $36.7 million, while gross margin expanded 781 basis points to 32.8%. The company won more than 20 new contracts during the quarter, with individual awards valued at up to $5 million. Backlog reached $270 million, up about $22 million from the beginning of the year. Management maintained its 2026 revenue target of $135-$165 million.

BigBear.ai is attempting to broaden its addressable market through products that can serve commercial as well as government customers. CargoSeer, for example, uses computer vision and AI to analyze cargo scans alongside customs and trade data. The company secured a five-year commercial deployment agreement in El Salvador following a 12-month pilot contract, potentially providing a model for international expansion.

The company is also expanding Ask Sage into disconnected and air-gapped environments, while ConductorOS is designed to coordinate drones, sensors and other autonomous systems from multiple vendors. These offerings could extend BigBear.ai's reach beyond traditional defense contracts.

However, profitability remains a challenge. Adjusted EBITDA was negative $11.6 million, compared with negative $8.5 million a year earlier, reflecting increased investments in sales, go-to-market activities and R&D.

With $410 million in cash and investments, BigBear.ai has resources to pursue product development and acquisitions. The key question is whether the company can convert its specialized defense expertise into repeatable commercial deployments and sustained revenue growth.

BBAI Faces Broader AI CompetitionBigBear.ai’s strategy places it alongside AI companies seeking to serve both government and commercial customers. Two relevant competitors are Palantir Technologies (PLTR - Free Report) and C3.ai (AI - Free Report) .

Palantir has a substantially broader commercial footprint while maintaining a strong government business. In the second quarter of 2026, Palantir’s revenues jumped 93% year over year to $1.94 billion, with U.S. commercial revenues rising 149% and U.S. government revenues increasing 90%. The company also closed 220 deals worth at least $1 million.

C3.ai similarly combines enterprise and government AI applications. Its fiscal 2026 results included agreements with defense and government agencies as well as companies across energy, manufacturing and other industries. In first-quarter fiscal 2027, C3.ai reported $52.4 million in revenues and continued winning federal and commercial contracts.

For BBAI, the competitive landscape highlights the opportunity — and challenge — of taking specialized, mission-ready AI into larger commercial markets while maintaining its defense and security expertise.

BBAI’s Price Performance, Valuation & EPS Estimate TrendShares of BBAI have plunged 20.2% over the past six months, underperforming the Zacks Computers - IT Services industry, as shown below.

BBAI’s 6-Month Price Performance
Image Source: Zacks Investment Research

BBAI stock is currently trading at a discount compared with the industry peers, with a forward 12-month price-to-sales (P/S) ratio of 8.55, as evidenced by the chart below.

P/S Ratio (F12M)
Image Source: Zacks Investment Research

The Zacks Consensus Estimate for BBAI’s 2026 loss per share has widened in the past 60 days, as shown below. However, the estimated figure indicates a narrower loss than the year-ago loss of 82 cents per share.

EPS Trend of BBAI
Image Source: Zacks Investment Research

BBAI’s Zacks RankBigBear.ai currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

BigBear.ai: Seeking Stability After Earlier Quarterly Revenue DeclinesBigBear.ai (BBAI -1.73%) generates most of its revenue by delivering complex artificial intelligence and machine learning decision support tools, focusing heavily on cyber engineering, cloud infrastructure management, and large-scale data processing solutions for a highly specialized client base, particularly the U.S. government.

It recently secured Dutch national regulatory approval for its Pangiam airport security screening software, and it simultaneously launched an expanded generative artificial intelligence platform designed specifically for use by government defense teams operating in classified network environments.

IONQ: Recording Consistent Upward Revenue TrajectoriesIONQ (IONQ +4.42%) primarily earns its revenue by constructing general-purpose quantum computing systems and selling commercial access to those computers, facilitating this access both directly and through prominent third-party cloud computing platforms.

It formally finalized its acquisition of the domestic semiconductor foundry SkyWater Technology, while simultaneously launching its sixth-generation commercial quantum computing platform and securing a contract extension for a specialized defense research program focused on developing scalable atomic clocks.

Why Revenue Matters for InvestorsRevenue helps market participants understand the baseline commercial demand for a particular business's core technological products and consulting services over consecutive operating periods. It reveals whether a company is successfully attracting customers and growing its overall business volume over time.

Quarterly Revenue Performance for BigBear.ai and IONQCalendar quarterBigBear.ai RevenueIONQ RevenueQ3 2024$41.5 million (quarter ended Sept. 30, 2024)$12.4 million (quarter ended Sept. 30, 2024)Q4 2024$43.8 million (quarter ended Dec. 31, 2024)$11.7 million (quarter ended Dec. 31, 2024)Q1 2025$34.8 million (quarter ended March 31, 2025)$7.6 million (quarter ended March 31, 2025)Q2 2025$32.5 million (quarter ended June 30, 2025)$20.7 million (quarter ended June 30, 2025)Q3 2025$33.1 million (quarter ended Sept. 30, 2025)$39.9 million (quarter ended Sept. 30, 2025)Q4 2025$27.3 million (quarter ended Dec. 31, 2025)$61.9 million (quarter ended Dec. 31, 2025)Q1 2026$34.4 million (quarter ended March 31, 2026)$64.7 million (quarter ended March 31, 2026)Q2 2026$36.7 million (quarter ended June 30, 2026)$80.0 million (quarter ended June 30, 2026)Foolish TakeComparing the revenue trends for BigBear.ai and IONQ provide revealing insights. Back in 2024, BigBear.ai's quarterly sales towered over IONQ. This makes sense given the former operates in the hot artificial intelligence sector while the latter focuses on nascent quantum computing technology.

Since then, a dramatic transformation has taken place. IONQ's revenue has taken off. In the second quarter, its sales were more than double BigBear.ai's, and the achievement occurred while quantum computers remain an emerging tech. This illustrates the potential for IONQ's business to soar once quantum machines achieve widespread adoption.

The company is making strides here. On Sept. 23, it announced a partnership with AI semiconductor leader Nvidia, where IONQ's latest quantum computer will connect with Nvidia's AI infrastructure to enable "large-scale quantum supercomputers capable of solving the world's hardest problems," according to IONQ.

Meanwhile, BigBear.ai experienced a year-over-year sales decline in 2025 as the federal government cut budgets. In Q2 of this year, the company reported 13% revenue growth over 2025 due to its acquisition of Ask Sage, an AI platform tailored to the needs of governments.

Key Takeaways BBAI's Q2 revenues rose 13% to $36.7M as Ask Sage drove growth and gross margin hit 32.8%.Ask Sage won with Naval Air Systems Command, while CargoSeer secured a five-year El Salvador deployment.BigBear.ai won 20 contracts and backlog hit $269.6M, but adjusted EBITDA loss widened to $11.6M. BigBear.ai (BBAI - Free Report) is showing early signs of improving its revenue mix as higher-margin artificial intelligence products become a larger contributor to growth. Second-quarter 2026 revenues increased 13% year over year to $36.7 million, primarily driven by Ask Sage’s generative AI platforms and products. More importantly, gross margin expanded sharply to 32.8% from 25% a year earlier, reflecting greater volume from these higher-margin GenAI offerings.

This shift could make BigBear.ai less dependent on traditional project-based work and increase the importance of scalable AI platforms and products. Ask Sage is gaining traction in secure government environments, including a second-quarter win with Naval Air Systems Command, while the company has expanded the platform into connected and air-gapped environments. CargoSeer also secured a five-year commercial deployment in El Salvador following a successful pilot, highlighting opportunities to expand AI-driven trade and border-security solutions internationally. Demand visibility is also improving. BigBear.ai won more than 20 contracts during the quarter, while backlog increased 9% from 2025-end to $269.6 million.

Still, the transition has not yet translated into stronger bottom-line performance. Adjusted EBITDA loss widened to $11.6 million from $8.5 million as spending on sales, marketing and growth increased. Therefore, the improving GenAI mix and margin expansion are encouraging, but sustained product growth and better operating leverage will be key to proving that BigBear.ai’s revenue quality is structurally improving.

How BigBear.ai’s Revenue Mix Compares With AI PeersBigBear.ai’s push toward higher-margin AI platforms puts it in closer competition with Palantir Technologies (PLTR - Free Report) and C3.ai (AI - Free Report) , both of which generate a larger share of revenue from software-led offerings. Palantir’s model remains more mature, with second-quarter 2026 gross margin of 85% and strong growth across government and commercial customers. Palantir also benefits from expanding platform adoption within existing accounts, highlighting the scalability BigBear.ai is pursuing through Ask Sage and other products.

C3.ai offers another useful comparison because subscription revenues represented 94% of its fiscal first-quarter 2027 revenues. C3.ai’s subscription-heavy mix provides greater recurring-revenue exposure, although profitability remains under pressure. For BigBear.ai, a growing contribution from GenAI products could gradually improve revenue quality. However, Palantir’s stronger margins and C3.ai’s subscription concentration show that BigBear.ai still has room to shift further toward scalable, higher-margin offerings.

BBAI’s Price Performance, Valuation & EPS Estimate TrendShares of BBAI have plunged 23.9% over the past six months, underperforming the Zacks Computers - IT Services industry, as shown below.

BBAI’s 6-Month Price Performance

Image Source: Zacks Investment Research

BBAI stock is currently trading at a discount compared with the industry peers, with a forward 12-month price-to-sales (P/S) ratio of 8.56, as evidenced by the chart below.

P/S Ratio (F12M)

Image Source: Zacks Investment Research

The Zacks Consensus Estimate for BBAI’s 2026 loss per share has widened in the past 60 days, as shown below. However, the estimated figure indicates a narrower loss than the year-ago loss of 82 cents per share.

EPS Trend of BBAI

Image Source: Zacks Investment Research

BBAI’s Zacks Rank

Investors searching for high-growth potential often look toward the frontiers of computation. Comparing BigBear.ai (BBAI +1.77%) and D-Wave Quantum (QBTS +0.84%) requires weighing established government contracts against the nascent potential of quantum computing.

BigBear.ai focuses on decision intelligence software for federal agencies, while D-Wave Quantum builds the hardware and cloud platforms for next-generation quantum processing. Both companies represent speculative plays in the tech sector, though they operate at different ends of the computational spectrum. This comparison explores which firm offers a more sustainable path forward.

The case for BigBear.aiBigBear.ai provides artificial intelligence solutions to the defense and intelligence sectors, specializing in decision intelligence for government agencies. In its latest annual report, filed for FY 2025, the company noted that the U.S. government accounted for nearly 51% of total revenue. This high level of customer concentration adds significant risk to the business model since it relies on specific federal funding cycles.

In FY 2025, revenue reached nearly $127.7 million, representing a decline of approximately 19.3% compared to the previous year. The company reported a net loss of roughly $293.9 million for the same fiscal period. This resulted in a net margin of nearly -230.2%, indicating that operating expenses far exceeded total sales during the year as the company adjusted its contract mix.

As of its December 2025 balance sheet, the debt-to-equity ratio was nearly 0.0x, indicating the firm carries negligible debt relative to shareholder equity. The current ratio, which measures the ability to pay short-term obligations using current assets, was roughly 1.8x. Free cash flow, or cash from operations minus capital spending, was nearly negative $46.3 million, and the firm maintains its position among cheap tech stocks while adhering to cybersecurity standards.

The case for D-Wave QuantumD-Wave Quantum is a pioneer in quantum computing, offering systems and cloud services to commercial and government clients. Its Leap platform allows businesses to access quantum processing power for logistics, drug discovery, and financial modeling through a cloud-based interface. The company works with high-profile organizations such as Mastercard (MA +0.68%), Pfizer (PFE +0.25%), and Siemens Healthineers (SEMHF +3.05%) to build its ecosystem.

In FY 2025, revenue reached approximately $24.6 million, which is a significant increase of nearly 178.5% year over year. Despite this rapid growth, the company reported a net loss of roughly $355.1 million. This led to a net margin of approximately -1,444.1%, highlighting the high costs associated with scaling a commercial quantum provider and developing proprietary hardware.

As of its December 2025 balance sheet, the current ratio was nearly 42.4x, suggesting a very high level of short-term liquidity. The debt-to-equity ratio was approximately 0.1x, meaning total debt is low compared to shareholder equity. Free cash flow for the period was nearly negative $75.8 million, and maintaining listing standards remains a priority as the firm navigates its early stage growth phase.

Risk profile comparisonBigBear.ai faces intense competition from large enterprise software firms and major defense contractors. Revenue concentration is a major risk, as business depends on a few government customers, and the firm must also navigate technology acceptance in the biometrics market. The company is also dealing with accounting errors and a class action lawsuit that requires restating multiple years of financial statements.

D-Wave Quantum operates in a highly volatile industry where the market for quantum computing may not develop as expected. The company has a history of net losses and must continue raising capital to fund research while integrating its acquired Quantum Circuits business. It also faces competition from tech giants like Microsoft (MSFT +0.65%), while advancements in classical computing could disrupt its growth trajectory.

Valuation comparisonBigBear.ai offers a significantly lower P/S ratio, comparing price to revenue, though neither firm has a positive Forward P/E based on earnings estimates.

MetricBigBear.aiD-Wave QuantumForward P/En/an/aP/S ratio10.5x503.6xValuation metrics sourced from Financial Modeling Prep (FMP) and may differ from other data providers.

I'd go with BigBear.ai. Both companies are early stage and unprofitable, but BigBear has something D-Wave is still working toward: a credible and growing commercial revenue stream backed by government contracts that competitors find difficult to displace.

D-Wave is doing fascinating work in quantum computing, and its bookings surged dramatically in the most recent quarter. But revenue fell sharply at the same time, and the gap between bookings momentum and actual recognized revenue is a risk that investors need to understand before buying in. Quantum computing's commercial moment is approaching, but it has not fully arrived yet.

BigBear.ai, by contrast, is winning classified national security contracts, growing its backlog, and improving gross margins at a pace that suggests the business model is starting to scale. The path to profitability is still long, but the direction is encouraging.

For a long-term investor comfortable with early stage risk, BigBear offers a clearer line of sight to sustainable revenue than D-Wave does right now.

As artificial intelligence moves from hype to hardware and software deployment, investors must decide where to allocate capital. Should you bet on BigBear.ai (BBAI -0.35%) or Cerebras Systems (CBRS -2.48%)?

BigBear.ai focuses on decision intelligence for government and commercial logistics, while Cerebras Systems builds massive wafer-scale processors for enterprise-level model training. Both companies operate in high-growth niches of the AI market. Still, they represent vastly different business models and risk profiles for investors seeking exposure to the next phase of computing.

The case for BigBear.aiBigBear.ai sells mission-ready AI and decision intelligence solutions for logistics, autonomous systems, and cybersecurity. It serves the U.S. defense and intelligence community, as well as commercial clients in manufacturing, distribution, and healthcare. In its 2025 annual report, the company noted that customers contributing over 10% of revenue accounted for nearly 51% of total revenue. Customer concentration like this adds a layer of risk to the business.

In 2025, revenue reached nearly $128 million, down from $158 million in the prior year. The company reported a net loss of $294 million for the fiscal year, resulting in a net margin of -230 %. Net margin measures how much profit a company makes per dollar of revenue, and a negative figure indicates that spending exceeded earnings.

As of its June 2026 balance sheet, the current ratio was close to 5.7x, which indicates the ability to cover short-term debts with current assets. The debt-to-equity ratio is approximately 0.0x, indicating the company has no debt relative to shareholders' equity.

Free cash flow for the period was a negative $73 million, representing the cash remaining after paying for operations and capital expenditures.

The case for Cerebras SystemsCerebras Systems designs massive AI compute systems and chips, such as the CS-3, designed to handle intensive training and inference workloads. It serves high-performance computing customers across North America, Asia, and Europe, competing among specialized semiconductor stocks. The company provides hardware to diverse sectors, including healthcare and energy, while maintaining relationships with several national research laboratories.

In 2025, revenue reached nearly $510 million, representing 76% growth over the previous year. The company reported net income of $238 million for the period. This resulted in a net margin of close to 47%, the percentage of revenue retained as profit after all costs are paid.

As of its June 2026 balance sheet, the current ratio is approximately 5.8x, indicating a healthy cushion to meet short-term financial obligations. The debt-to-equity ratio was roughly 0.1x, indicating that total liabilities exceed shareholders' equity.

Free cash flow for the trailing-12-month period as of Q2 2026 was a negative $680 million, which represents the cash remaining from operations after accounting for capital expenditures.

Risk profile comparisonBigBear.ai faces significant risks, including a material class action lawsuit related to disclosed accounting errors and delays in regulatory filings. Its revenue concentration is high, and government contracts can be terminated unilaterally by the customer. The company has a history of net losses and recently reported significant non-cash impairment charges on its assets.

Cerebras Systems operates in a highly competitive market against other semiconductor companies. Maintaining technological leadership in the chip industry requires immense capital and continuous innovation to avoid becoming obsolete. The company must also manage the complexities of scaling its hardware production to meet global demand from enterprise and government clients.

Valuation comparisonCerebras Systems carries a significantly higher P/S ratio than its peer, while BigBear.ai lacks a Forward P/E ratio due to its recent net losses.

MetricBigBear.aiCerebras SystemsForward P/En/a148.1xP/S ratio11.2x81.6xValuation metrics sourced from Financial Modeling Prep (FMP) and may differ from other data providers.

I would invest in Cerebras Systems over BigBear.ai. Cerebras is demonstrating much stronger and more consistent growth for its technology, indicating a larger addressable market. BigBear is promising but has struggled to achieve steady, meaningful revenue growth that would justify a long-term investment in the stock.

Cerebras has continued to grow at high rates in 2026, with second-quarter revenue up 74% year over year. This indicates significant upside potential for growing sales of its inference services. Management expects core revenue to more than triple in 2027, with continued growth in the coming years.

Meanwhile, BigBear's revenue grew 13% year over year in Q2, and the backlog grew 9%. The company signed 20 new contracts last quarter. Increasing defense spending on drones and other systems is a catalyst for the company's long-term growth. But the company's inconsistent quarterly revenue in recent years makes this more of a speculative play compared with the consistent growth Cerebras is seeing.

Key Takeaways BigBear.ai secured 20 new Q2 contracts, following a $53M intelligence-community deal in Q1.BigBear.ai added NASA and Naval Air Systems Command while expanding secure, air-gapped generative AI.BBAI's backlog rose 9% from year-end 2025, while budget delays and contract risks remain key challenges. BigBear.ai (BBAI - Free Report) appears to be gaining traction with government customers as demand for mission-ready AI, secure generative AI and autonomous-system technologies grows. In the second quarter of 2026, the company secured more than 20 new contracts with existing and new customers, with individual values reaching up to $5 million. This followed a $53 million long-term intelligence-community contract announced in the first quarter. Backlog also increased 9% from year-end 2025, supporting better revenue visibility.

Recent wins show that BigBear.ai is broadening its reach across government agencies. After adding NASA as an Ask Sage customer, the company secured a contract with Naval Air Systems Command, which supports U.S. Navy and Marine Corps aircraft and weapons systems. BigBear.ai also expanded its generative AI offering for defense and other federal departments, adding air-gapped capabilities that allow AI deployment in highly secure environments. Its ConductorOS platform has also demonstrated interoperability during U.S. Army exercises, strengthening its relevance as defense agencies increase investments in drones and autonomous systems.

Another potential advantage is BigBear.ai’s CMMC Level 2 certification, which validates its ability to protect controlled government information and could strengthen trust with federal customers.

Still, government procurement remains vulnerable to budget constraints, funding delays, contract cancellations and shifting priorities. Overall, BigBear.ai’s expanding contract pipeline, specialized secure-AI capabilities and deeper defense relationships provide a solid foundation for further government customer growth, although consistent contract conversion will be key.

How BBAI Compares With Key Government AI RivalsPalantir Technologies (PLTR - Free Report) and C3.ai (AI - Free Report) represent two key competitors as BigBear.ai seeks to expand its government customer base. Palantir remains a formidable rival because of its deeply established position across U.S. defense and intelligence agencies. Palantir’s U.S. government revenues surged 90% year over year to $809 million in second-quarter 2026, highlighting strong adoption of its AI and data platforms across federal missions. Palantir’s scale, existing relationships and ability to expand deployments within agencies could intensify competition for new AI contracts.

C3.ai is also strengthening its federal presence. In fiscal first-quarter 2027, C3.ai closed agreements with the USDA, Defense Logistics Agency, Department of War and Marine Corps. C3.ai continues to target federal growth through its enterprise and agentic AI offerings. For BigBear.ai, competing with Palantir and C3.ai will depend on differentiating through specialized, mission-ready AI and secure deployment capabilities.

BBAI’s Price Performance, Valuation & EPS Estimate TrendShares of BBAI have plunged 29.3% over the past six months, underperforming the Zacks Computers - IT Services industry, as shown below.

BBAI’s 6-Month Price Performance
Image Source: Zacks Investment Research

BBAI stock is currently trading at a discount compared with the industry peers, with a forward 12-month price-to-sales (P/S) ratio of 8.82, as evidenced by the chart below.

P/S Ratio (F12M)
Image Source: Zacks Investment Research

The Zacks Consensus Estimate for BBAI’s 2026 loss per share has widened in the past 60 days, as shown below. However, the estimated figure indicates a narrower loss than the year-ago loss of 82 cents per share.

EPS Trend of BBAI
Image Source: Zacks Investment Research

BBAI’s Zacks Rank

When AI-enhanced security company BigBear.ai (BBAI -2.01%) reported earnings at the end of July, investors seemed pleased. Shares rose 18% over the next two weeks.

But unfortunately for BigBear.ai investors, it didn't last. Since then, the company's stock price has tumbled 11.8%. On Tuesday, they plunged below the $3/share milestone. Further declines could be coming.

Is BigBear.ai's stock now in danger of having to perform a reverse split? Here's what investors should know.

Image source: Getty Images.

BigBear.ai's earnings weren't great Enthusiastic investors eagerly bid up BigBear.ai's share price after the company's Q2 earnings report on July 30. That report featured some wins, but left a lot of issues unresolved.

Quarterly revenue of $36.7 million was up 13% year-over-year (YOY), and gross margins also improved from 25% to 32.8% on a YOY basis. That means BigBear.ai is not only making more money, but sending more of the money it makes to the bottom line.

The company also managed to cut its net losses significantly, from $228.6 million in the prior-year quarter to just $25.7 million this year.

BigBear.ai CEO Kevin McAleenan also reaffirmed full-year revenue guidance and touted more than 20 new contracts as a basis for optimism.

The problem for the AI company is that it burned $68.6 million in cash during the quarter, its share count keeps increasing, and while Q2 and trailing twelve-month (TTM) revenue were up from 2025, both are still down from 2024, 2023, and 2022.

In spite of that, a reverse split seems unlikely. Here's why.

Image source: Getty Images.

Why BigBear.ai stock probably won't reverse split Although the stock now trades for less than $3/share, the threshold for maintaining its listing on the New York Stock Exchange (NYSE) is just $1/share, and BigBear.ai shares are still well above that level.

BigBear.ai's share price has briefly dropped below $3/share twice since 2025 without a reverse split: in July, it hit $2.59/share before rebounding, and in April 2025, it dropped to $2.39/share before soaring to $9.78/share later that year. Management is likely hoping for another such turnaround.

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Speaking of management, because reverse splits are often used by troubled companies to maintain their listing on an exchange, company leaders usually try to avoid them. If BigBear.ai announced a reverse split, it might signal that management was worried about shares dropping below the $1 threshold. That could quickly become a self-fulfilling prophecy as nervous investors fled the stock.

Unless BigBear.ai's share price drops below $2/share, investors probably don't have to worry about a reverse split. But this is still a stock that shareholders should keep an eye on. Its price is already volatile, and a single canceled contract or unfavorable news report could have an outsize impact.

Key Takeaways BigBear.ai ended Q2 with a $270M backlog, up 9% from year-end, strengthening revenue visibility.More than 20 new contracts added momentum, with individual values reaching $5M during the quarter.Q2 revenues rose 13% to $36.7M, while Gen AI drove gross margin to 32.8%. BigBear.ai Holdings, Inc. (BBAI - Free Report) is building a stronger base of contracted business as demand for specialized AI solutions expands across national security, trade and travel. Recent contract activity points to growing customer adoption across these markets, while the company’s focus on applied AI gives it opportunities to address complex and security-sensitive use cases. The key factor for the revenue outlook is whether this expanding contract base can translate into a higher level of reported sales.

BigBear.ai ended the second quarter with a $270 million backlog, which increased 9% from year-end. The company also secured more than 20 new contracts during the quarter, with individual values of up to $5 million, following a $53 million total contract value intelligence contract announced in the first quarter. This contract momentum provides greater visibility into future revenues and supports the company’s 2026 top-line guidance of $135 million to $165 million.

The latest results provide an early indication of that conversion. Second-quarter revenues increased 13% year over year to $36.7 million, driven by Gen AI platforms and products. Gross margin also expanded to 32.8%, up 781 basis points, as the revenue mix shifted toward higher-margin Gen AI offerings.

However, converting backlog into revenues will require continued execution across new and existing contracts. Adjusted EBITDA was negative $11.6 million compared with negative $8.5 million a year earlier, reflecting higher investment in sales, go-to-market capabilities and research and development.

Overall, the $270 million backlog and recent contract wins strengthen revenue visibility. The pace at which these awards move into recognized revenues will be a key factor in determining whether BigBear.ai can build on its current top-line growth.

BBAI Faces Competition From Palantir and C3.aiBigBear.ai operates in a competitive AI market, with Palantir Technologies (PLTR - Free Report) and C3.ai (AI - Free Report) standing out as relevant peers.

Palantir has a strong presence in defense, national security and commercial AI applications. It focuses on combining AI, data and workflow capabilities to support customers operating in complex and sensitive environments. Palantir’s secure AI and platform capabilities overlap with areas targeted by BigBear.ai, particularly mission-focused applications and government use cases.

C3.ai provides AI solutions across enterprise and government markets, with exposure to defense, intelligence and aerospace. The company is also focused on improving product development and customer deployments across its target markets. C3.ai’s broad enterprise AI offering creates overlap with BigBear.ai’s focus on applied AI, while it remains positioned across a wider range of enterprise and government applications.

BBAI’s Price Performance, Valuation & EPS Estimate TrendShares of BBAI have plunged 22.3% over the past six months, underperforming the Zacks Computers - IT Services industry, as shown below.

BBAI’s 6-Month Price Performance
Image Source: Zacks Investment Research

BBAI stock is currently trading at a discount compared with the industry peers, with a forward 12-month price-to-sales (P/S) ratio of 8.93, as evidenced by the chart below.

P/S Ratio (F12M)
Image Source: Zacks Investment Research

The Zacks Consensus Estimate for BBAI’s 2026 loss per share has widened in the past 60 days, as shown below. However, the estimated figure indicates a narrower loss than the year-ago loss of 82 cents per share.

EPS Trend of BBAI
Image Source: Zacks Investment Research

BBAI’s Zacks Rank

Key Takeaways BigBear.ai's Q2 revenue rose 13% to $36.7 million, driven by stronger generative AI performance.BigBear.ai secured 20 contracts and grew backlog to $270 million, up about $22 million since year-end.CargoSeer, Ask Sage and ConductorOS expand BigBear.ai's AI reach across trade, security and defense. BigBear.ai Holdings, Inc. (BBAI - Free Report) is gaining traction as it expands the deployment of its applied AI solutions across defense, security, trade and travel. In the second quarter of 2026, revenue increased 13% year over year to $36.7 million, driven by stronger performance from its generative AI platforms and products. Gross margin soared to 32.8%, up 781 basis points from the prior-year quarter.

New customer wins and product deployments are providing additional avenues for growth. BigBear.ai secured more than 20 contracts during the quarter, with individual values of up to $5 million, while backlog reached $270 million, up about $22 million from the start of the year. The company also highlighted a five-year CargoSeer deployment agreement in El Salvador following a successful 12-month pilot, potentially providing a template for expansion into other customs markets.

The company is also broadening its AI offerings beyond connected environments. Ask Sage now supports local and air-gapped deployments, allowing customers in highly secure settings to use generative AI without relying on external networks. Meanwhile, ConductorOS demonstrated its ability to coordinate multi-vendor drone systems, addressing the growing need for interoperability across autonomous platforms.

Still, broader growth will depend on converting these deployments and contract wins into sustained revenue. Adjusted EBITDA remained negative at $11.6 million as the company increased spending on sales, go-to-market initiatives and R&D. With $410 million in cash and investments, BigBear.ai has resources to pursue additional capabilities and acquisitions, but execution will remain key to widening its growth base.

Competitors Expand Their AI and Defense CapabilitiesBigBear.ai competes with technology providers that combine AI, data analytics and defense-focused solutions. Palantir Technologies (PLTR - Free Report) is a key competitor, with its platforms helping government and commercial customers integrate data, AI and decision-making capabilities. Its growing focus on deploying AI directly into operational environments overlaps with BigBear.ai’s strategy of providing mission-ready solutions.

C3.ai (AI - Free Report) is another relevant competitor, offering enterprise AI applications designed to address operational and analytics needs across industries. Its AI capabilities span areas such as defense, manufacturing and supply-chain management, creating some overlap with BigBear.ai’s efforts to expand applied AI beyond its traditional customer base.

BigBear.ai’s differentiation centers on specialized applications for national security and trade and travel, including CargoSeer, Ask Sage and ConductorOS. The company’s recent deployments demonstrate an emphasis on solving specific mission-critical problems, while competitors pursue broader AI platforms and enterprise applications.

BBAI’s Price Performance, Valuation & EPS Estimate TrendShares of BBAI have plunged 22.2% over the past six months, underperforming the Zacks Computers - IT Services industry, as shown below.

BBAI’s 6-Month Price Performance
Image Source: Zacks Investment Research

BBAI stock is currently trading at a discount compared with the industry peers, with a forward 12-month price-to-sales (P/S) ratio of 9.67, as evidenced by the chart below.

P/S Ratio (F12M)
Image Source: Zacks Investment Research

The Zacks Consensus Estimate for BBAI’s 2026 loss per share has widened in the past 30 days, as shown below. However, the estimated figure indicates a narrower loss than the year-ago loss of 82 cents per share.

EPS Trend of BBAI
Image Source: Zacks Investment Research

BBAI’s Zacks RankBigBear.ai currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

BBAI's 14% monthly gain reflects stronger revenues, margins and contract wins, but losses and widening estimates temper the stock's discounted valuation.

Investors often choose between speculative high-growth software and established hardware giants. Today we compare BigBear.ai (BBAI -2.10%) and Texas Instruments (TXN +2.25%) to see which path offers the best opportunity right now.

BigBear.ai provides specialized intelligence software primarily for government defense, while Texas Instruments manufactures the essential chips found in everything from cars to factory robots. As artificial intelligence transitions from a buzzword to an industrial necessity, comparing a high-stakes software provider to a hardware veteran provides valuable insight for any diversified portfolio looking for exposure to modern infrastructure.

The case for BigBear.aiBigBear.ai sells AI-driven decision support tools to the U.S. Intelligence Community and Department of Defense. The company recently acquired Pangiam to expand its biometrics capabilities for both government and commercial sectors like manufacturing and healthcare. Customer concentration like this adds a layer of risk to the business, as revenue depends heavily on federal appropriations and fixed-price contracts that can be canceled at any time.

In FY 2025, revenue reached nearly $127.7 million, representing a decline of roughly 19.3% compared to the previous year. The company reported a net loss of approximately $293.9 million for the period, which resulted in a negative net margin of 230.2%. This margin figure measures how much loss is generated for every dollar of sales, reflecting the high costs of scaling a technology start-up.

As of its December 2025 balance sheet, the debt-to-equity ratio sat at a conservative 0.19x, indicating that the company carried very little debt relative to shareholder equity just prior to completely clearing its obligations in early 2026. The current ratio, which measures the company's ability to pay short-term obligations with short-term assets, is roughly 1.8x. Free cash flow, or the cash left after paying for capital projects, was negative $46.3 million during the fiscal year.

The case for Texas InstrumentsTexas Instruments produces analog and embedded processors for more than 100,000 global customers. The company focuses on the industrial and automotive markets, which together represent about 66% of its total revenue. By selling directly to customers through its own website, the firm maintains close relationships and captures more value from the semiconductor stocks landscape.

In FY 2025, revenue reached nearly $17.7 billion, which was an increase of approximately 13% over the prior year. Net income for the period was close to $5.0 billion, maintaining a healthy net margin of roughly 28.3%. This indicates it kept nearly 28 cents of every revenue dollar as profit after all expenses were paid.

As of its December 2025 balance sheet, the debt-to-equity ratio is roughly 0.9x, meaning total debt (combining short-term and long-term obligations) is slightly less than the equity held by shareholders. The current ratio is approximately 4.4x, suggesting a strong ability to cover short-term debts. Free cash flow for the year reached nearly $2.6 billion, providing the company with significant capital for dividends and reinvestment.

Risk profile comparisonBigBear.ai faces significant revenue concentration, as a few government agencies provide most of its funding. The company is also navigating financial instability, including multi-year restatements of its financial records and ongoing regulatory filing delays. Furthermore, it must defend against a material class action lawsuit while integrating acquisitions in a crowded market.

Texas Instruments is sensitive to the cyclical nature of the chip industry, where demand can drop suddenly if customers adjust inventories. Geopolitical tensions also pose a threat, as the company generates roughly 20% of its revenue from China. Additionally, it must maintain high manufacturing output in its own factories to offset the high fixed costs of its 300mm wafer fabs.

Valuation comparisonTexas Instruments appears more expensive on a P/S ratio basis, but BigBear.ai lacks a Forward P/E due to its current net loss.

MetricBigBear.aiTexas InstrumentsForward P/EN/A32.2xP/S ratio12.5x14.1xValuation metrics sourced from Financial Modeling Prep (FMP) and may differ from other data providers.

I'd go with Texas Instruments, and it is not a close call. TI just delivered one of its strongest quarters in years, with revenue growing across industrial, data center, and automotive markets simultaneously. Data center revenue doubled year over year, free cash flow surged to levels the company has rarely seen, and management issued above-seasonal guidance for the third quarter. The company also raised prices for the first time in years, which signals confidence in where demand is heading.

BigBear.ai is carving out a defensible niche in AI-powered national security software, and its government contracts are the kind that competitors find difficult to displace. Gross margins are improving, and the backlog is growing. For investors comfortable with early stage risk, the story is worth following.

But BigBear.ai is still unprofitable and generating a fraction of what Texas Instruments produces in free cash flow in a single quarter. TI is a battle-tested compounder with a growing dividend and broad exposure to some of the most durable demand trends in semiconductors. For a long-term investor, that track record is difficult to compete with.