BigBear.ai Holdings, Inc. (BBAI): A Bull Case Theory

We came across a bullish thesis on BigBear.ai Holdings, Inc. on Value investing subreddit by Icy_Abbreviations167. In this article, we will summarize the bulls’ thesis on BBAI. BigBear.ai Holdings, Inc.'s share was trading at $5.94 as of September 16th.

BigBear.ai (BBAI) has emerged as a notable small-cap AI company with potential for long-term growth, standing out from typical AI “penny stock” plays. The company provides advanced AI solutions across defense, logistics, and identity management, securing contracts that give it a tangible business foundation rather than purely speculative hype. Recent results, while mixed, beat expectations, demonstrating resilience and validating the company’s operational capabilities. The stock’s profile changed materially when Goldman Sachs increased its stake by nearly 570%, now holding over 2.3 million shares, signaling strong institutional confidence.

Other investors followed suit: Rhumbline Advisers boosted holdings by 18%, NewEdge Advisors increased its position by over 440%, Mirae Asset Global ETFs added roughly 160,000 shares, and AQR Capital Management opened a new position. Collectively, institutional ownership now exceeds 7.5% of BBAI’s float, a meaningful level for a small-cap AI stock, highlighting growing confidence in the company’s growth trajectory. With a market capitalization around $2 billion, BBAI remains highly volatile, but its increasing contract wins and institutional backing provide a strong foundation for potential upside.

These developments suggest that the stock could be significantly rerated if growth continues and contracts scale, potentially rewarding early investors substantially. Even amid short-term volatility, the combination of real AI applications, revenue traction, and rising institutional ownership positions BBAI as a compelling candidate for a long-term investment, offering a unique risk/reward profile relative to other small-cap AI names. For investors willing to navigate its volatility, BBAI represents a strategic opportunity to participate in a company that may look obvious in hindsight as its contracts and market recognition expand.

Previously we covered a bullish thesis on BigBear.ai Holdings, Inc. by yonimm1234 in January 2025, which highlighted its Palantir partnership, Pangiam acquisition, strong government contracts, and 28% insider ownership. The company's stock has appreciated roughly 50% since then. The thesis still stands as BBAI builds its AI and security platform. Icy_Abbreviations167 shares a similar view but emphasizes rising institutional ownership, including Goldman Sachs’ 570% stake, highlighting growing confidence and potential rerating.

BigBear.ai Holdings, Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 20 hedge fund portfolios held BBAI at the end of the second quarter which was 17 in the previous quarter. While we acknowledge the potential of BBAI as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.