Key Points
BigBear.ai recently reported earnings numbers, which weren't impressive.
The company's revenue declined significantly last quarter, and it continues to incur losses and burn cash.
Investing in up-and-coming tech companies that are involved with artificial intelligence (AI) can seem like a great idea. But it can be difficult to separate the pretenders from the stocks that are the real deals, especially at the early stages.
One tech stock that investors have been excited about in the past due to its potential related to data analytics and AI is BigBear.ai Holdings (NYSE: BBAI). Bullish investors have compared it to tech giant Palantir Technologies, in the hopes that it can follow in its footsteps. BigBear.ai, however, still has a lot to prove.
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This year, the tech stock is off to a rough start, with shares of BigBear.ai down 24% as of Monday's close, pushing its market cap down below $2 billion. Has the stock become a bargain buy?
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BigBear.ai's sales dropped 38% last quarter
On Monday, BigBear.ai released its fourth-quarter earnings numbers, boasting of it being in its "strongest financial position in company history." The company finished 2025 with $462 million in cash and investments, providing it with significant runway to not only run but also grow its business.
The cash-burning business, however, has been experiencing significant volatility, as its revenue for the last three months of 2025 totaled $27.3 million -- representing a sharp 38% reduction from the $43.8 million it posted in the same period last year. The tech company blames the decline on Army programs, where there has been less volume. For the full year, BigBear.ai's revenue totaled $127.7 million, which was down from $158.2 million in 2024. And its operating loss for the past year totaled $213.9 million, which was larger than the $133.4 million loss it incurred a year ago.
The business is expecting around 17% revenue growth for the year, with its top line projected to fall within a range of $135 million and $165 million. Suffice to say, it's been a bumpy ride for BigBear.ai in recent years, and AI hasn't been resulting in its business taking off.
Should you buy BigBear.ai stock?
BigBear.ai's stock hasn't been doing well this year, and with its latest results and guidance giving growth investors some underwhelming numbers, I don't expect a turnaround for the stock anytime soon. Not only is the company burning through cash and incurring losses, but it's also struggling to generate any type of consistent and sustainable growth.
Until the company demonstrates some stability in its operations, I'd avoid BigBear.ai stock. It may be tempting to dream of this company one day being the next Palantir, but at this stage, that's all it is -- a dream.
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David Jagielski, CPA 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.
