Why BigBear.ai Stock Is Skyrocketing Today

BigBear.ai (NYSE: BBAI) stock is posting big gains in Thursday's trading. The software company's share price was up 10.5% as of 11:15 a.m. ET. Meanwhile, the S&P 500 index was up 0.1%, and the Nasdaq Composite index was essentially flat.

After the market closed Wednesday, BigBear.ai announced that Kevin McAleenan had been appointed as its new CEO and given a seat on its board of directors. McAleenan had already been serving as the company's president, and succeeds Mandy Long in the CEO role.

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Wall Street is bullish on BigBear.ai's CEO change

The CEO change was made effective Wednesday, and investors are optimistic that BigBear.ai's new leader will help it unlock some significant growth opportunities. During President-elect Donald Trump's first term, McAleenan served as acting secretary of the Department of Homeland Security and as commissioner of Customs and Border Protection. In 2020, he was a founder of Pangiam -- a biometric identity verification company that was acquired by BigBear.ai last year.

What comes next for BigBear.ai?

BigBear.ai's new CEO has substantial experience when it comes to working with U.S. security agencies, and it's possible that his background will better position the company to win Pentagon contracts for artificial intelligence (AI) software and other services -- a goal that is central to the company's growth strategy. However, former CEO Long said during the last quarterly conference call that the business was seeing some hesitancy from government agencies when it came to AI spending.

Following Thursday morning's gains, BigBear.ai is valued at roughly $925 million and is trading at approximately 4.8 times this year's expected sales. Given the software specialist's recent sales momentum, it's possible that BigBear.ai could see significant multiple expansion if investors gain confidence about its growth outlook under its new CEO.

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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.