BigBear.ai's Shares Soar 300%, but Financial Concerns Raise Questions About Its Valuation

In 2025, BigBear.ai's stock price has soared by more than 300%, driven by a surge in defense-related AI contracts and frequent comparisons to Palantir Technologies. Despite this impressive rally, experts remain divided on whether the momentum can last. The stock, which ended at $7.05 on October 24, has experienced significant swings, including a 22% jump in early October after announcing a collaboration with Tsecond Inc., as reported by a

. This partnership merges BigBear's ConductorOS platform with Tsecond's durable BRYCK devices, establishing the company as a significant force in battlefield AI by enabling instant threat identification without needing cloud access, according to a .

The upward trend in the stock has also been supported by notable rollouts of its veriScan biometric system, such as at Chicago O'Hare International Airport, where it cut the time for processing international travelers from one minute to just ten seconds. These achievements coincide with increased federal spending on AI, especially the $300+ billion "One Big Beautiful Bill" (OB3) for defense and homeland security. Yet, BigBear's financial results present a mixed picture. In the second quarter of 2025, revenue dropped 18% year-over-year to $32.5 million, and a net loss of $228.6 million—mainly due to accounting adjustments—highlighted ongoing operational issues. The company has reduced its full-year revenue outlook to between $125 million and $140 million and has retracted its profit projections because of project setbacks.

There is no consensus among analysts regarding the stock's valuation. H.C. Wainwright has raised its price target to $8, pointing to a "stronger balance sheet" and benefits from OB3, while others caution that the stock is already valued at 13 times its projected sales, suggesting that much optimism is already reflected in the price. Simply Wall St's models estimate a fair value of $5.83, which is about 20% below the current price. At the same time, Seeking Alpha's review warns that BigBear's underlying business—especially its flat revenue growth—does not support the recent surge, describing the stock as "a valuation rally amid vanishing fundamentals", as stated in a

.

BigBear is up against tough competition from established names like Palantir and C3.ai. While these companies lead in defense and enterprise AI, BigBear's $30 million in quarterly sales is dwarfed by Palantir's multi-billion dollar revenues. C3.ai, which recently posted a 19% drop in revenue and a $116.7 million net loss, is also dealing with leadership changes and sales challenges, according to a

. For BigBear, future growth depends on turning its $380 million backlog of contracts into actual revenue and making headway in commercial sectors, as seen in its new deals in the UAE and Panama.

The next few weeks will be pivotal. The upcoming earnings report on November 10 may decide if the stock continues to climb or faces a pullback due to missed expectations. Optimists believe that BigBear's $390 million in cash and its strategic role in defense AI could drive long-term gains, while skeptics highlight the risks of depending on a handful of large contracts and the uncertainty of scaling its business.

As competition intensifies in the AI defense industry, BigBear.ai represents a high-risk wager on innovation versus financial fundamentals—a story that could shape its path in the near future.