Wall Street's Top AI Stock Pick: BBAI vs. VRT vs. SMCI

BigBear.ai Holdings (BBAI) has declined 31% in the past month after Q2 results missed expectations and a revenue guidance downgrade. Despite this, the stock has soared 301% over the past year. Analysts see potential for improvement in revenue visibility and long-term growth due to favorable industry and legislative trends. The stock has a Moderate Buy consensus rating with an average price target of $10.

BigBear.ai Holdings, Inc. (NYSE: BBAI) has seen its stock price decline by 31% in the past month following the release of its second-quarter 2025 earnings report, which missed market expectations. The company reported a net loss of $228.6 million, down from $14.4 million in the same period last year, and revenue decreased to $32.5 million from $39.8 million in Q2 2024. Despite these setbacks, the stock has soared 301% over the past year, reflecting investors' optimism about the company's long-term prospects.

The earnings report highlighted several key points. The company's balance sheet showed a record cash balance of $390.8 million as of June 30, 2025, positioning it to accelerate growth. However, the company has withdrawn its previously provided Adjusted EBITDA guidance for the full year-ended December 31, 2025, citing uncertainty on certain Army programs and new anticipated growth investment spending in the second half of the year.

BigBear.ai's CEO, Kevin McAleenan, noted that the company is well-positioned to capitalize on opportunities from the "One Big Beautiful Bill," which will bring a generational investment and provide over $170 billion in supplemental funding. Additionally, the company signed a transformative partnership with leading companies in the UAE under the IHC umbrella, demonstrating its international expansion potential.

Despite these growth opportunities, the company has seen disruptions in federal contracts from efficiency efforts, notably in programs that support the U.S. Army. These disruptions have led to a year-over-year decrease in gross margin from 27.8% to 25.0% and an increase in non-cash changes in derivative liabilities of $135.8 million.

Analysts remain bullish on the stock despite the recent setbacks. Scott Buck at H.C. Wainwright reiterated his Buy rating but trimmed his price target from $9 to $8, expecting revenue visibility to improve as the business approaches 2026 and sees BigBear.ai benefiting long-term from the "One Big Beautiful Bill." Similarly, Jonathan Ruykhaver of Cantor Fitzgerald maintained a Buy rating and raised his price target to $6 from $5 per share, highlighting the company's backlog growth and strategic initiatives.

The stock has a Moderate Buy consensus rating with an average price target of $10. Investors should closely monitor the company's progress in navigating the challenges in its U.S. government segment and its ability to capitalize on long-term growth opportunities.

References:
[1] https://ir.bigbear.ai/news-events/press-releases/detail/116/bigbear-ai-announces-second-quarter-2025-results-updates
[2] https://www.tipranks.com/news/should-investors-buy-the-dip-in-bigbear-ai-stock-bbai-after-q2-losses
[3] https://www.timothysykes.com/news/bigbearai-inc-bbai-news-2025_08_19/