HomeBusinessCould BigBear.ai Become the Next Palantir Technologies?

Could BigBear.ai Become the Next Palantir Technologies?

Palantir Technologies delivers a banner year for shareholders, driven by exceptional growth and accelerating profitability. As of this writing, the stock has returned 285% year to date, amid market optimism that this artificial intelligence (AI) innovator is still in the early stages of a global expansion opportunity.

There’s a lot to like about Palantir, but investors may also want to look at other industry players following a similar path of disruptive innovation. BigBear.ai (NYSE: BBAI) is one such small company from the technology sector that is developing various AI applications with enormous potential.

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Could BigBear.ai be the next Palantir? Here’s what you need to know.

Image source: Getty Images.

With a market cap of $550 million, BigBear.ai is small next to Palantir, which has grown to a stock value of $150 billion. Despite this significant difference in size, the two companies have some similarities. Both specialize in cloud-based software powered by AI and machine learning that allows organizations to analyze complex data sets to gain predictive insights. In fact, BigBear.ai and Palantir have an ongoing strategic partnership to integrate each other’s capabilities.

Features such as generative AI and workflow automation are proving to be a game-changer for productivity, capitalizing on strong demand from businesses across the economy. At this point, Palantir has been more successful so far with comprehensive end-to-end solutions, while BigBear.ai is only just building traction by targeting niche markets with specialized offerings.

A key theme for Palantir is the ability to move beyond its historic government and defense sector focus into commercial applications. In its last reported third quarter (for the period ending September 30), Palantir’s revenue rose 30% year over year, thanks precisely to large enterprise customers adopting the company’s Artificial Intelligence Platform (AIP). The revenue momentum has translated into sharply higher profits, with trends expected to continue into 2025 and beyond.

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On the other hand, BigBear.ai still lacks that breakthrough moment, as most of its business is driven by a handful of large contracts in the Department of Defense. In the company’s third quarter (for the period ending September 30), BigBear.ai’s revenue rose a solid 22% from last year, although this follows a trend of weaker results in previous quarters.

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