Can BigBear.ai Capitalize on $320B National Security Funding Tailwind?

BigBear.ai Holdings, Inc. BBAI is entering a pivotal phase as sweeping federal investments reshape the defense technology landscape. The recently passed One Big Beautiful Bill (OB3) allocates nearly $320 billion in supplemental funding to the Department of Homeland Security and Department of Defense. With national security, border protection, and AI-driven autonomy at its core, BigBear.ai is directly aligned with these spending priorities.

The company already has traction in biometrics, deploying traveler processing solutions across more than 25 airports and seaports. OB3 earmarks $6.2 billion for border technology and $673 million for biometric exit, offering BigBear.ai a clear runway to scale its veriScan platform. On the defense side, OB3’s $16 billion autonomy fund matches BigBear.ai’s ConductorOS, which recently demonstrated battlefield potential during multinational exercises.

Financially, second-quarter 2025 results were mixed. Revenue slipped to $32.5 million due to Army contract disruptions, while adjusted EBITDA loss widened to $8.5 million. Yet the balance sheet strength—$391 million in cash, the highest in company history—gives management flexibility to pursue growth both organically and through acquisitions.

BigBear.ai must broaden its contract pipeline beyond a handful of federal programs and prove it can convert policy-driven demand into recurring revenue. With historic funding tailwinds and a fortified balance sheet, the company has a window of opportunity. If it can capture even a modest share of the $320 billion allocation, BigBear.ai could emerge as a leading player in AI-powered defense solutions.

Competitors in the National Security AI Race

BigBear.ai is not the only company aiming to benefit from the national security funding boom. Palantir Technologies PLTR remains a formidable rival with deep-rooted government contracts and proven data analytics platforms. Palantir has long been embedded within the Department of Defense and the intelligence community, giving it a strong edge in capturing a sizable portion of the OB3 allocations. The scale and integration of Palantir’s AI platforms make it a consistent competitor for BigBear.ai in mission-critical projects.

Another competitor, C3.ai AI, is aggressively expanding its government-focused offerings. With a broad suite of AI applications spanning defense readiness, predictive maintenance, and logistics, C3.ai has positioned itself as a direct alternative to BigBear.ai in securing large federal deals. Both Palantir Technologies and C3.ai bring larger scale and established reputations, which means BigBear.ai must differentiate with specialized products like veriScan and ConductorOS. Success will depend on its ability to out-innovate Palantir and C3.ai while leveraging its cash reserves for targeted growth.

BBAI’s Price Performance, Valuation and Estimates

Shares of the company have gained 64.8% in the past three months, significantly outperforming the Zacks Computers - IT Services industry, the Zacks Computer and Technology sector and the S&P 500 index. A key driver of the rally is BigBear.ai’s expanding footprint in U.S. defense and homeland security.

BBAI Price Performance

In terms of its forward 12-month price-to-sales ratio, BBAI stock is trading at 10.83, down from the industry’s 16.97.

BBAI’s P/S Ratio (Forward 12-Month) vs. Industry

Over the past seven days, the Zacks Consensus Estimate for BBAI’s 2025 loss per share has widened to $1.10 from 41 cents. The company had reported the same in the year-ago period. 
 

BBAI stock currently carries a Zacks Rank #4 (Sell). 

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

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