BigBear.ai Doubles Down on Applied AI: Can It Win More Defense Deals?

BigBear.ai is expanding its AI offerings. Ask Sage now supports secure, air-gapped environments. This allows customers to use generative AI without an external network connection.

ConductorOS is another growth opportunity. The platform connects drones, sensors and autonomous systems from different vendors. This could become increasingly important as defense agencies expand their use of autonomous technologies.

Financial results also showed progress. Second-quarter 2026 revenues rose 13% year over year to $36.7 million. Gross margin increased to 32.8%. However, adjusted EBITDA remained negative at $11.6 million. Higher sales and R&D spending weighed on the metric.

BigBear.ai ended the quarter with $410 million in cash and investments. Backlog stood at $270 million. The opportunity is significant. However, the company must turn contract wins into sustained revenue growth. Improving profitability will also be crucial. If it succeeds, the applied AI focus could help BigBear.ai secure more defense deals.

BBAI Faces Competition From Palantir and C3.ai

BigBear.ai operates in a competitive AI market, with Palantir Technologies PLTR and C3.ai AI standing out as relevant peers.

Palantir has a strong presence in defense and national security. Its Artificial Intelligence Platform allows defense customers to deploy AI across classified networks and tactical environments. Palantir’s focus on secure AI and interoperability directly overlaps with areas targeted by BigBear.ai.

C3.ai is another notable competitor. The company provides AI solutions for federal agencies, defense organizations and other industries. Its federal, defense and aerospace bookings rose 134% year over year in the fiscal third quarter. C3.ai also secured agreements with several U.S. government and defense organizations.

BigBear.ai is smaller but is pursuing a focused strategy around mission-specific AI. The company’s growing contract wins, defense applications and specialized platforms could help it carve out a niche. However, competing with larger AI players will require strong execution and continued innovation.

BBAI’s Price Performance, Valuation & EPS Estimate Trend

Shares of BBAI have declined 18.4% over the past six months, underperforming the Zacks Computers - IT Services industry, as shown below.

BBAI’s 6-Month Price Performance

Image Source: Zacks Investment Research

BBAI stock is currently trading at a discount compared with the industry peers, with a forward 12-month price-to-sales (P/S) ratio of 10.15, as evidenced by the chart below.

P/S Ratio (F12M)

Image Source: Zacks Investment Research

The Zacks Consensus Estimate for BBAI’s 2026 loss per share has widened in the past 30 days, as shown below. However, the estimated figure indicates a narrower loss than the year-ago loss of 82 cents per share.

EPS Trend of BBAI

Image Source: Zacks Investment Research

BBAI’s Zacks Rank

BigBear.ai currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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