BigBear.ai: Small Size with Great Potential

On Tuesday, the stock of BigBear.ai, a company specializing in server and storage solutions, experienced an impressive surge, climbing by as much as 20.9% at one point. By late morning, the price remained up by 19.1%. The catalyst for this remarkable increase was optimistic comments in an international publication that favorably compared BigBear.ai to the data analysis and AI specialist Palantir Technologies. According to a report in the Economic Times, BigBear.ai, which currently has a much lower market capitalization, could become the next Palantir. With an enterprise value of only 668 million dollars, BigBear is significantly smaller than the industry giant Palantir, which is currently valued at 159 billion dollars. Since the emergence of generative AI, BigBear.ai has gained considerable attention. The company offers decision-intelligent solutions enhanced by AI and machine learning to assist executives in making informed decisions. These services resemble those of Palantir, highlighting parallels between the two companies. Analyst Dan Victor notes that both companies provide cloud-based software for AI and machine learning, which aids organizations in analyzing complex data sets. An ongoing strategic partnership with Palantir could benefit BigBear.ai. Palantir's artificial intelligence platform is increasingly recognized by companies and governments, while BigBear.ai targets more specific solutions for smaller markets. However, some favorable developments are necessary for BigBear.ai to rise to the ranks of the major players. In the third quarter, the company recorded a revenue increase of 22% to 41.5 million dollars but suffered a loss per share of 0.05 dollars. In contrast, Palantir generated 726 million dollars in revenue and an earnings per share of 0.06 dollars during the same period, illustrating the stark differences between the two. Nonetheless, with a revenue multiplier of about 3 compared to Palantir's 46, BigBear.ai offers an attractive value proposition. However, due to BigBear.ai's smaller size and lack of profits, the investment remains risky and should be carefully considered.