BigBear.ai Soared Again Today. Is the Stock a Buy?

Key Points

• BigBear.ai stock booked another day of big gains in Thursday's trading.

• The double-digit rally occurred despite no major positive news for the business.

• BigBear.ai stock has surged as interest in defense AI plays has soared, but the company has a lot of proving to do.

• 10 stocks we like better than BigBear.ai ›

BigBear.ai (NYSE: BBAI) stock saw another day of explosive gains Thursday despite no major business-specific catalysts for the company. Its share price rose 15.2% in the daily session and had been up as much as 17.7% earlier in the day's trading. The S&P 500 closed out the day up 0.5%, and the Nasdaq Composite climbed 0.7% in the session.

With investors betting that macroeconomic and political dynamics will continue to lift the broader market, today was an especially strong day of trading for growth-dependent and otherwise speculative tech stocks. BigBear.ai stock recorded another day of double-digit gains despite no fresh news hitting the scene -- although the stock may have gotten a boost from Palantir climbing to a new valuation high. BigBear.ai stock has frequently seen gains in conjunction with rallies for Palantir this year, but it's not clear that performance between the two companies is necessarily correlated.

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Is BigBear.ai stock a buy right now?

After today's gains, BigBear.ai now has a market capitalization of roughly $2.4 billion and trades at approximately 14.2 times this year's expected sales. While that price-to-sales ratio may look relatively small compared to some other companies in the AI software and services space, BigBear.ai's relatively weak margins and midpoint target for sales growth of roughly 7.5% this year suggest that the stock may be too risky to buy right now.

BigBear.ai stock has surged roughly 230% over the last three months despite little in the way of substantive developments on the business front to support the valuation. The company has seen a massive valuation run-up as investors have piled into AI software and service providers with exposure to the defense industry, but BigBear.ai's valuation gains appear to be broadly disconnected from material business developments for the company in recent months.

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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Palantir Technologies. The Motley Fool has a disclosure policy.