BigBear.ai (NYSE:BBAI) shares took off today, jumping 22% after the company announced a partnership that struck a chord with investors eager to see AI put to work in real-world defense settings. The national security-focused firm is joining forces with Tsecond to deliver AI-powered edge infrastructure that brings powerful computing capabilities directly to the field.
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By combining BigBear’s ConductorOS orchestration platform with Tsecond’s BRYCK hardware, the collaboration aims to let defense and security teams run advanced AI models on-site, without relying on cloud connectivity. In essence, it’s about equipping tactical units with the ability to process data, detect threats, and make critical decisions on the spot, even in the most demanding environments.
Yet, despite the enthusiasm, not everyone is convinced the fundamentals have caught up with the price action. Investor Nelson Alves, who’s been closely tracking BigBear’s recent swings, described the situation as one where “the tape is telling one story while the near-term fundamentals still tell another.” The investor called this a classic moment when price runs ahead of the narrative, and the only question is whether the narrative can catch up before the chart runs out of steam.
Alves reminds investors how we got here. The company’s second quarter was, in his words, a “gut punch.” BigBear cut its full-year revenue forecast to between $125 million and $140 million, withdrew its EBITDA guidance altogether, and saw revenue drop nearly 18% year over year to $32.5 million. Margins slipped, losses widened, and hefty non-cash charges dragged results even lower. But there was one bright spot – the balance sheet. BigBear raised ~$293 million through its at-the-market program, finishing the quarter with about $391 million in cash and, for the first time, a net cash position. Alves called that the only “unequivocal win” of the quarter.
The investor also pointed out how the stock’s technical setup may be doing the heavy lifting right now. After collapsing post-earnings, BBAI spent weeks building a tight base before reclaiming its gap-down range – a move that flipped resistance into support. Momentum has surged, with volume expanding and indicators like RSI and MACD turning positive, signaling that traders are pressing their bets on the long side. Alves believes that if the stock can clear its “boss level” – roughly $9.20 to $9.60 – with strong volume, it could trigger another wave of buying and possibly a second leg higher, even without new fundamental news.
Still, the investor is quick to warn that the story needs to deliver. The company’s pipeline remains narrow, its recent share sale was dilutive, and the disruptions in U.S. Army programs will take time to work through. What could justify the rally, he says, is evidence that backlog growth – especially funded backlog – starts to accelerate again. If BigBear can turn those opportunities tied to national security AI initiatives into multiyear awards soon, the revenue trajectory might finally catch up to the chart. Until then, Alves sees this as a “price first, narrative later” moment, one where excitement is running ahead of the scoreboard, which is why he rates BBAI shares a Hold (i.e., Neutral). (To watch Alves’ track record, click here)
Meanwhile, Wall Street’s coverage of BigBear remains relatively sparse, with only 3 recent analyst calls, two Buys and one Hold, translating to a Moderate Buy consensus. But at $9.09 a share, the average price target of $5.83 implies analysts still see ~36% downside over the next year. (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.