Is BigBear.ai the Next Palantir? What You Should Know Before Investing

BigBear.ai Holdings, Inc.’s BBAI shares have risen 27.3% over the past year, positioning it as a potential competitor to Palantir Technologies Inc. PLTR in the artificial intelligence (AI) defense sector. But is this comparison far-fetched, and is BigBear.ai worth buying given that the stock remains in negative territory this year? Let’s take a closer look.

What’s Driving Optimism Around BigBear.ai

BigBear.ai strengthened its capabilities by acquiring Ask Sage in December 2025, followed by the acquisition of CargoSeer in January 2026. Alongside these strategic moves, the company expanded its operations into the Middle East to broaden its geographic revenue base, positioning itself for strong growth in the years ahead.

The Ask Sage acquisition, in particular, has the potential to accelerate revenue growth and strengthen BigBear.ai’s standing in the national defense and security market. By integrating Ask Sage, BigBear.ai enhances its platform with a secure generative AI workflow, enabling customers to implement AI solutions while maintaining data privacy, a crucial requirement for defense clients.

Following these strategic initiatives, BigBear.ai’s management has expressed confidence and expects full-year 2026 revenues to be between $135 million and $165 million, up 17% at the midpoint compared to 2025’s revenue of $128 million, according to the company’s press release.

BigBear.ai’s cash balance of $462 million as of Dec. 31, 2025, further supports its ongoing growth initiatives. Kevin McAleenan, CEO of BigBear.ai, also noted that the company has reduced its debt by more than 90%, which significantly lowers its financial risk.

Is BigBear.ai Positioned to Become the Next Palantir?

While BigBear.ai’s revenue projections for the current year appear encouraging, its fourth-quarter 2025 performance highlighted some challenges. Revenue declined 38% to $27.3 million from $43.8 million a year ago, primarily due to reduced volume in Army-related programs, which indicates a potential risk tied to customer concentration.

Gross margin also came under significant pressure, declining from 37.4% in the fourth quarter of 2024 to 20.3% in the fourth quarter of 2025, raising clear concerns about profit consistency. BigBear.ai, anyhow, remains unprofitable, raising concerns about the long-term viability of its business model. While the company’s net loss narrowed to $5.8 million in the fourth quarter of 2025 from $138.2 million a year ago, the improvement was mostly due to accounting adjustments rather than actual operational performance.

In contrast, Palantir delivered strong profitability, reporting a GAAP net income of $609 million in the fourth quarter of 2025, reflecting a solid 43% margin, according to investors.palantir.com. Its GAAP net income is also expected to grow each quarter throughout 2026. Additionally, with a Rule of 40 score of 127%, way above the 40% benchmark, the company demonstrated a highly scalable business model.

Unlike BigBear.ai, Palantir reported revenue for the fourth quarter of 2025 of $1.4 billion, marking a 70% year-over-year increase and a 19% rise from the previous quarter. Management also projects full-year 2026 revenue between $7.182 million and $7.198 billion, up from $4.475 billion in 2025. Given this strong growth, it’s premature to determine whether BigBear.ai could reach Palantir’s scale anytime soon.

Is BigBear.ai Stock Still a Buy Despite the Challenges?

BigBear.ai recently bolstered its position through strategic acquisitions, international expansion, enhanced AI offerings for defense clients and lower financial risk, which may encourage current stakeholders to maintain their holdings.

However, prospective investors should exercise caution as the company continues to struggle with profitability, face margin pressures and declining revenues. They should wait for these issues to improve before investing.

BigBear.ai currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here.

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