Will National Security Demand Drive BigBear.ai's 2026 Revenue Cycle?

National security spending is emerging as the strongest tailwind for BigBear.ai Holdings, Inc. BBAI heading into 2026, with multiple indicators suggesting a cyclical upswing in demand for secure, mission-grade AI. The company’s strategic pivot toward defense-aligned generative AI solutions — underscored by its definitive agreement to acquire Ask Sage — positions it to capitalize on a rapidly expanding federal AI ecosystem. Ask Sage already serves more than 16,000 government teams and more than 100,000 users, giving BigBear.ai an immediate distribution channel inside the agencies, driving the next wave of AI modernization.

BigBear.ai’s timing aligns with accelerating federal adoption. The government’s pipeline of generative-AI use cases has grown more than eightfold since 2023, and management expects unprecedented investment cycles in 2026–2027 driven by defense modernization priorities and the One Big Beautiful Bill funding vehicle. These trends support the company’s expectation that delayed border-security and defense opportunities from the shutdown will convert into 2026 contracts despite near-term revenue softness.

Financially, BigBear.ai enters this cycle with exceptional liquidity. The firm reported a record $715 million in cash and investments in the third quarter of 2025, giving it the balance-sheet strength to scale platform deployment, pursue high-value federal programs and integrate Ask Sage without compromising flexibility. While revenue declined year over year in the quarter due to lower Army program volume, the company maintains its 2025 outlook and views 2026 as the inflection year for growth.

If national security agencies accelerate procurement as expected, BigBear.ai’s secure AI stack — spanning identity, threat detection, agentic AI and mission-specific automation — could drive a meaningful rebound in its 2026 revenue cycle. The combination of market momentum, technology fit and strategic positioning suggests the company is moving into a demand-rich environment that plays directly to its strengths.

Competitors Challenging BigBear.ai’s Push Into Mission-Grade AI

Palantir Technologies PLTR and C3.ai AI remain two of the most influential competitors shaping BigBear.ai’s national-security revenue outlook. Palantir continues to dominate defense analytics, and Palantir has broadened its AI Platform footprint across the DoD, enabling faster deployment cycles that directly overlap with BigBear.ai’s ambitions. With deep roots inside intelligence and combatant commands, Palantir repeatedly strengthens its first-mover advantage in mission-critical AI, making it a persistent competitive force.

C3.ai, meanwhile, is expanding aggressively through its suite of model-driven enterprise and defense applications. C3.ai increasingly positions its platform as a turnkey environment for rapid AI adoption, and it has been vocal about targeting federal agencies undergoing modernization. Its growing partnerships and defense-aligned applications allow C3.ai to compete for many of the same multiyear government contracts BigBear.ai is pursuing.

Together, Palantir and C3.ai represent entrenched rivals whose scale, federal credibility and rapid AI deployment capabilities shape the competitive landscape BigBear.ai must navigate.

BBAI Stock’s Price Performance & Valuation Trend

BigBear.ai gained 141.9% over the past year and outperformed major benchmarks, the Zacks Computer and Technology sector, and even the Zacks Computers – IT Services industry, as shown below.

BBAI Stock’s One-Year Performance

BBAI stock is currently trading at a premium compared with the industry peers, with a forward 12-month price-to-sales (P/S) ratio of 18.03, as evidenced by the chart below.

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

EPS Trend of BBAI Stock

Over the past month, expectations for the company’s 2025 loss per share narrowed from $1.10 to 93 cents, while the anticipated 2026 loss per share improved from 32 cents to 25 cents. The company had previously posted a loss of $1.10 in the year-ago period, making the projected trajectory one of steady improvement rather than abrupt transformation.
 

BigBear.ai stock currently carries a Zacks Rank #2 (Buy). 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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