BigBear.ai Holdings (NYSE:BBAI) has been on a scorching run over the past month, with its share price gaining almost 70%. Though BBAI stumbled slightly yesterday, it’s clear that the market has been singing a different tune since a Q2 2025 earnings miss pressured the share price in the weeks that followed.
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Indeed, the Q2 2025 earnings report on August 11 fell short of both top- and bottom-line projections, with EPS GAAP of -$0.71 missing by -$0.65 and revenues of $32.47 million missing by $8.11 million.
The company cited disruptions from U.S. government contracts, especially with programs connected to the U.S. army, which caused BBAI to adjust their full-year revenue guidance downward from $160 to $180 million to $125 to $140 million.
What a difference a few weeks make, however.
The market has shifted its focus toward recent developments with BBAI, including the approval of a facial recognition project at the Nashville International Airport and a project to enhance maritime domain awareness with the U.S. Navy.
In addition, the One Big Beautiful Bill is expected to direct funding toward defense- and security-related AI initiatives – which could provide additional tailwinds for BBAI.
Is the last month indicative of more gains to come? Top investor Harsh Chauhan isn’t so certain.
“BigBear.ai’s valuation makes it clear that the stock is priced beyond perfection,” explains the 5-star investor, who is among the very top 1% of stock pros covered by TipRanks.
Chauhan points out that BigBear.ai hasn’t disclosed a dollar value regarding its recently announced partnerships, so future revenues remain a bit hazy. The investor also finds the company’s heavy reliance on federal contracts a point of concern, as it means that BBAI is at the mercy (and timetable) of government budgets and contracting processes.
The investor believes that the “big jump” may be a bit premature, and notes that BBAI’s 12-month median price target implies potential losses of 33%. In other words, proceed with an abundance of caution.
“It would be a good idea for investors to stay away from this AI stock and look at other options that are clocking healthy growth levels and have the potential to jump higher,” sums up the investor. (To watch Harsh Chauhan’s track record, click here)
Wall Street has a bit of a mixed view of BBAI, though the lightly covered stock hasn’t attracted an enormous amount of attention over the past few months. With 2 Buys and 2 Holds, BBAI carries a Moderate Buy consensus rating. Its 12-month average price target of $5.75 points to a downside of ~33%. (See BBAI stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured investor. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.