Why BigBear.ai Stock Skyrocketed Today

BigBear.ai (NYSE: BBAI) stock surged in Monday's trading. The company's share price ended the day's trading up 18.7% and had been up as much as 26.2% earlier in the session.

BigBear.ai stock jumped today following news that the company is taking part in a new partnership to provide services to the U.S. Air Force. The software specialist is teaming up with Proof Labs to provide a new cybersecurity solution for operations in space.

BigBear.ai gets a big boost from a new subcontractor deal

BigBear.ai published a press release today announcing that it had entered into a new partnership with Proof Labs to provide a cyber resilient on-orbit (CROO) cybersecurity solution for the U.S. Air Force. Proof Labs is the primary service provider in the deal, and BigBear has been brought on through a subcontractor role.

The new CROO service will make use of BigBear.ai's SpaceCREST digital twin platform for alerts and real-time monitoring of satellite-network cyberinfrastructure. The company will also be training the CROO solution's artificial intelligence (AI) and machine learning systems to provide coverage against cyber-attack vectors.

What comes next for BigBear.ai stock?

While landing the new partnership with Proof Labs to provide service for the Air Force is a positive development for BigBear.ai, it's not clear how much of an actual sales impact it will wind up having. Proof Labs is the main provider of the CROO solution, and it's possible that investors overreacted to the deal's announcement today. BigBear.ai stock has been highly volatile lately, and it looks like the company's share price could continue to see more big swings in the near term.

Notably, company insiders and large shareholders have been selling a lot of stock lately. On Friday, the company's largest shareholder submitted another filing with the Securities and Exchange Commission (SEC) indicating that it planned to sell another significant block of stock. BBAI Ultimate Holdings, which is a unit within BigBear's majority stakeholder AE Industrial Partners, submitted a filing showing that it planned to sell 2,851,290 shares.

While BigBear.ai has benefited from meme-stock momentum lately, BBAI Ultimate Holdings and AI Industrial Partners have been selling substantial amounts of stock. Even though the stock got a pop from today's partnership announcement, the company's share price could face significant pressure if its largest shareholder continues to reduce its position.

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Keith Noonan 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.