BBAI Eyes New Verticals: Will Diversification Strengthen Its Moat?

BigBear.ai Holdings, Inc. BBAI is betting that diversification across markets will fortify its long-term competitive edge. The company, traditionally known for the national security and defense focus, is extending reach into travel, logistics and international markets, positioning itself to capture growth beyond federal contracts.

In the second quarter of 2025, BigBear.ai highlighted new deployments of the biometric solutions in airports and seaports, expanding its presence in global travel and trade security. Meanwhile, its Shipyard AI is gaining traction in supply chain and shipbuilding, aligning with major funding streams in critical infrastructure. Internationally, partnerships in the UAE and Panama signal that BigBear is actively cultivating relevance outside the U.S. defense ecosystem.

Financially, the company ended the second quarter with a record $391 million in cash, giving it the flexibility to pursue both organic initiatives and acquisitions. This strong balance sheet is particularly important as near-term headwinds, such as disruptions in certain Army contracts, pressured quarterly revenues, which fell to $32.5 million, down $7.3 million year over year. Still, leadership emphasized that broadening the customer pipeline and moving into new verticals reduces reliance on a handful of large federal programs.

The question for investors is whether diversification can create a durable moat. By spreading its technology across defense, border security, logistics and commercial partnerships, BigBear.ai aims to build resilience against contract timing risks while tapping into generational AI adoption trends. If executed well, this strategy could position BBAI as more than a niche defense contractor, potentially transforming it into a global AI infrastructure player.

Competition Heats Up in AI Defense and Infrastructure

BigBear.ai’s expansion into defense autonomy, border security and logistics pits it against larger rivals with established footprints. Palantir Technologies PLTR is perhaps the most direct competitor. Known for its deep government ties and advanced data integration platforms, Palantir has successfully scaled beyond defense into healthcare and commercial sectors. Palantir’s ability to win long-term contracts and rapidly deploy AI-driven solutions creates a formidable barrier for smaller players like BigBear.ai.

Meanwhile, C3.AI AI represents competition on the commercial AI front. While not as entrenched in defense, C3.ai has aggressively pursued enterprise AI adoption across energy, manufacturing and supply-chain management. This overlap with BigBear.ai’s logistics and industrial initiatives highlights the challenge of diversifying into spaces already targeted by well-capitalized peers.

For BigBear.ai, the key differentiator may lie in leveraging its federal expertise while carefully scaling into adjacent markets without overstretching resources.

BBAI’s Price Performance, Valuation and Estimates

Shares of the company have gained 100.2% year to date, outperforming the Zacks Computers - IT Services industry, the Zacks Computer and Technology sector and the S&P 500 Index.

BBAI’s Price Performance

In terms of its forward 12-month price-to-sales ratio, BBAI stock is trading at 24.19, up from the industry’s 17.05.

P/S (F12M)

Over the past 90 days, the Zacks Consensus Estimate for BBAI’s 2025 loss per share has widened to $1.10 from 41 cents. The company reported the same in the year-ago period.
 

BBAI currently carries a Zacks Rank #3 (Hold). 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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