While BigBear.ai (BB.AI) trades at a low share price, a deeper analysis reveals a more compelling opportunity in another AI-focused technology stock with superior revenue growth and profitability metrics. Investors seeking exposure to the AI sector should consider alternatives with stronger fundamentals.
- BB.AI revenue grew 4% YoY to $89 million in the latest quarter
- BB.AI posted a net loss of $21 million, worsening from $18 million the prior year
- A competing AI stock reported $312 million in revenue, up 42% YoY
- The alternative stock achieved $47 million in net income, demonstrating profitability
- The alternative stock has a 68% share price increase over the past 12 months
- BB.AI’s R&D spending is 12% of revenue, compared to 29% for the high-growth alternative
BigBear.ai (BB.AI) has attracted attention for its sub-$5 share price, leading some investors to assume it’s undervalued. However, a closer look at its financials reveals stagnant revenue growth and persistent operating losses. In the most recent fiscal quarter, BB.AI reported $89 million in revenue, up just 4% year-over-year, with a net loss of $21 million—worsening from the prior year’s $18 million loss. Its price-to-sales ratio stands at 0.8x, which appears low on the surface, but fails to account for declining margins and lack of scalability in its core government contracting business. In contrast, a peer in the AI infrastructure space—identified in institutional research as a leading provider of generative AI platforms—has demonstrated robust performance. That company reported $312 million in revenue, a 42% increase from the same quarter last year, and achieved GAAP profitability with a net income of $47 million. Its forward price-to-earnings ratio is 28x, reflecting investor confidence in long-term growth despite a higher valuation. The disparity in growth trajectories suggests that BB.AI’s low price is not a sign of bargain pricing, but rather a reflection of weak underlying performance. The alternative stock has seen its share price rise 68% over the past 12 months, driven by expanding enterprise client adoption and contract wins in cloud-based AI services. Its R&D investment as a percentage of revenue—29%—also signals a strategic commitment to innovation, unlike BB.AI, which spends only 12%. Market participants, particularly in the technology and AI sectors, are shifting capital toward firms with measurable scalability and accelerating earnings momentum. As institutional flows continue to favor high-growth AI platforms, stocks like BB.AI may face increasing pressure unless they demonstrate a clear path to sustainable profitability.