Why BigBear.ai Stock Is Soaring Again Friday

Friday is looking like another good day for holders of BigBear.ai (NYSE: BBAI) stock. The fast-growing technology company offers artificial intelligence (AI) decision-making solutions using advanced analytics, predictive models, and other tools for organizations in various industries.

As of 2:03 p.m. ET, the stock was trading up by 31.6%, tacking on to what is now an approximately 110% gain since last week's close.

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Is BigBear.ai the next Palantir?

These moves higher came after the company announced two new contracts with the U.S. military in the past week. Some investors may now be wondering if BigBear.ai could become the next Palantir Technologies.

On Thursday, BigBear.ai said the Department of Defense awarded it a contract to advance its Virtual Anticipation Network (VANE) prototype. The company plans to help the Office of the Secretary of Defense utilize custom AI models to improve its assessment and analysis of news media originating in countries that are deemed potential U.S. adversaries.

Defense is just one of the sectors that BigBear.ai serves. But Palantir has realized impressive revenue growth supporting the U.S. military by providing data analysis and management to support intelligence analysis, counterterrorism, and security solutions for military networks. Its strengths in those areas helped drive Palantir's stock upward by about 425% over the last year. It now has a market cap of $262 billion, compared to just $2 billion for BigBear.ai.

On a price-to-sales (P/S) basis, BigBear.ai is trading at about 9, a much lower multiple than Palantir's, which is around 95. But Palantir generated nearly $2 billion in revenue in 2024 and is growing at a faster rate.

BigBear.ai previously predicted its 2024 revenue could reach $180 million. The company will report fourth-quarter results on March 7, and some investors are buying shares now, betting that it will outpace that guidance.

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Howard Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Palantir Technologies. The Motley Fool has a disclosure policy.