BigBear.ai, the fast-growing technology company specializing in artificial intelligence (AI) decision-making solutions, is experiencing remarkable stock surges following key government contract announcements. Today, at 2:03 p.m. ET, shares of BigBear.ai saw an impressive increase of approximately 39%, marking over 110% gains since the previous week's close.
These gains primarily stemmed from the company’s recent contract awards from the Department of Defense (DoD). According to reports, BigBear.ai was selected by the DoD's Chief Digital and Artificial Intelligence Office (CDAO) to advance its Virtual Anticipation Network (VANE) prototype, which aims to develop custom AI models. This initiative focuses on enhancing assessments of media originating from countries considered potential foreign adversaries, demonstrating the strategic role of BigBear.ai’s technology within U.S. national security efforts.
The defense sector is just one aspect of BigBear.ai's diverse operations, which also include various industries. Since the announcement, investors have become increasingly optimistic about the company’s growth potential, wondering aloud if BigBear.ai might be on the path to emulate the extraordinary success of Palantir Technologies. Palantir, renowned for its significant revenue growth through military contracts, has seen its stock rise by about 425% over the last year, hovering at a substantial market cap of $262 billion.
While BigBear.ai currently holds only $2 billion in market cap, it is trading at about 9 times its revenue on a price-to-sales basis, significantly less than Palantir's exorbitant 95 times. Critics caution, though, as BigBear.ai previously predicted its 2024 revenue might reach only $180 million, significantly lagging behind some industry counterparts.
Many investors are hedging their bets on BigBear.ai's upcoming earnings report scheduled for March 7, which may provide clearer insights about its financial health and the impact of these new contracts. The firm’s stock price, having surged as high as $8.60 during mid-day trading, reflects the intense interest surrounding companies in the AI sector. Trading volume also surged to 119,975,816 shares, compared to the average of 52,934,691 shares, indicating high investor engagement.
Meanwhile, the enthusiasm for AI stocks isn't limited to BigBear.ai. Tempus AI, another company made headlines with its recent acquisition of Ambry Genetics, surged 12% today as TD Cowen reinitiated coverage with a 'buy' rating and set the target price at $74 per share. This spike is notable considering Tempus had already gained 115% since Nancy Pelosi's notable purchase of shares earlier this year.
SoundHound AI is also benefiting from the AI market’s momentum, even without specific company news. It recorded slight gains of 2.1% today, and its shares have enjoyed substantial growth since last October, up 250%. Wall Street anticipates SoundHound will report revenue of $83.9 million this year, with projections doubling to $164 million for the next year.
Investors are keeping close tabs on BigBear.ai as they compare its recent performance with more established firms in the sector. Despite BigBear's recent successes, it's important to acknowledge the volatility it has faced; the stock previously fluctuated between lows of $1.16 and highs of $8.73 over the past twelve months. Its current performance has placed it under the spotlight as prospective investors assess its viability compared to juggernauts like Palantir.
Overall, BigBear.ai's recent contract wins from the DoD appear to be driving its stock higher, igniting broader interest and excitement across the AI investing community. Investors are undoubtedly poised for significant developments, as upcoming reports could illuminate how these contracts will fuel the company's growth and whether BigBear.ai can sustain its upward momentum.