BigBear AI (BBAI) stock has dropped 62% from its February peak, but the artificial intelligence defense contractor may be better positioned than its battered stock suggests.
The catch is its deep ties inside the U.S. intelligence community.
“BigBear AI already operates well inside the U.S. intelligence community, even though its share price still trades like a speculative small cap,” well-followed analyst J Keynes wrote in a recent X post..
“The firm treats Washington's most secret customers as its core market, and that shows up in both its contract wins and its real estate choices,” they said.
Much like Palantir (PLTR), which generates a large chunk of revenue from federal contracts, BigBear leans heavily on government clients, particularly the Department of Defense, the Department of Homeland Security, and the CIA.
As Investors Observer previously noted, government contractors often enjoy a buffer from broader market pressures. Federal spending on intelligence and defense tends to remain strong even during economic downturns.
Roughly one-third of BigBear’s revenue came from government agencies as of 2023, with the rest coming from private-sector clients.
While it's early to call BigBear AI “recession-proof,” the company operates in one of the most resilient corners of the economy, especially with Trump aiming to expand defense budgets.
Keynes also pointed to the company’s physical footprint: BigBear’s headquarters sit just 15 minutes from the CIA’s Langley campus, a location that fits its $141 million analytics contract awarded by the National Security Agency in 2021.
BBAI stock cools off after huge run
After surging more than 200% over the past 12 months on the back of AI hype, increased defense spending, and fresh U.S. government contracts, BigBear stock has consolidated in recent months.
The stock currently trades below $4, valuing the company at roughly $1.1 billion.
In Q1 2025, BigBear reported 5% year-over-year revenue growth to $34.8 million and slashed its long-term debt by $58 million. The company ended the quarter with $107.6 million in cash.
BigBear also raised $64.7 million during the quarter via stock option exercises.
While still unprofitable, losses are narrowing. The company posted a net loss of $62 million in Q1, down from $127.6 million a year earlier.
For full-year 2025, BigBear projects revenue between $160 million and $180 million, with adjusted earnings expected to remain in the negative single-digit millions.
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