There’s a strong case to be made for BigBear.ai (NYSE:BBAI), as the AI-driven decision-intelligence company is well positioned to benefit from the surge in funding directed toward security-related technologies.
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One of the biggest sources of funding is slated to come from the U.S. government, as the proposed U.S. FY 2026 defense budget is requesting $13.4 billion for autonomy and autonomous systems.
BBAI already has its foot firmly through this door, holding multiple partnerships within the U.S. security sector. This includes a collaboration with the Joint Chiefs of Staff on force management and a domain awareness project with the U.S. Navy.
The company can also point to other high-profile projects, including face recognition security screening at U.S. airports and cargo screening at the Panama Canal.
While the company’s share price has gained significant ground over the past half year (more than doubling since hitting a mid-April trough), it has been falling back to earth over the past few weeks.
Concerns over valuation, continued losses, and reduced 2025 revenue guidance have weighed on sentiment, while the ongoing government shutdown has added further uncertainty to the timing of new contract awards.
All of these unknowns have combined to convince one top investor known as Juxtaposed Ideas to wait a bit before loading up shares.
“I believe that the stock’s outsized rally and the management’s lowered FY2025 guidance have triggered a minimal margin of safety at current levels,” explains the 5-star investor, who is among the top 2% of stock pros covered by TipRanks.
That’s not to say that Juxtaposed is bearish on BigBearAI. On the contrary, the investor points to the growing backlog of $380 million, which grew ~43% year-over-year in Q2.
However, the overall AI exuberance had pushed BBAI too high, leaving it susceptible to a DeepSeek-like event that could push the share price lower still. The investor will therefore be extremely curious to better understand how the company’s revenues and sales cycles are shaping up when BBAI shares its Q3:25 earnings report on Monday, November 10. Until then, Juxtaposed is content to stay on the sidelines.
“Pending further clarity on the ongoing federal contract disruption in the upcoming FQ3’25 earnings call, I prefer to maintain my prior Hold rating here,” sums up Juxtaposed Ideas. (To watch Juxtaposed Ideas’ track record, click here)
BigBear.ai isn’t widely covered on Wall Street, but among the 3 analysts tracked by TipRanks, two rate it a Buy and one a Hold, giving the stock a Moderate Buy consensus rating. The average 12-month price target of $5.83 suggests just below 3% upside from current levels. (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.