BigBear.ai (NYSE: BBAI) Shares posted big gains in the last week of trading. The company’s stock price ended Friday’s daily trading session up 23.4% from the previous week’s market close, according to data from S&P Global Market Intelligence. Meanwhile, the S&P500 index ended the week with a loss of 2%, and the Nasdaq Composite index ended the period with a decline of 2.3%.
Despite bearish news about Federal Reserve interest rates this week, shares of BigBear.ai managed to post explosive gains. The company’s share price ended the period with a dramatic increase thanks to new contracts and partnerships.
On Monday, BigBear.ai published a press release announcing a new partnership with Proof Labs. Through the partnership, BigBear will work on a cyber-resilient space-based cybersecurity solution intended for use by the U.S. Air Force. The news sparked a day of big gains for the company’s stock.
On Thursday, the software specialist announced that it has won a new 10-year contract with the US General Services Administration (GSA). The contract has no maximum contract value and is intended for multiple projects to streamline procurement for civil and defense projects.
The company’s stock price initially shot up on the GSA news, but essentially ended the day in the red as investors turned away from riskier growth stocks following comments from Fed Chairman Jerome Powell. The Fed now expects to make just two rate cuts of 25 basis points next year, down from its previous forecast that suggested there would be four cuts of that size. BigBear stock managed to post gains in Friday trading amid a recovery for the broader market.
BigBear.ai stock has been volatile lately, with shares seeing big swings coupled with contract gains, macroeconomic risks, and meme stock momentum. This week’s contract wins provided substantial bullish news for the company, but investors should keep in mind that it’s difficult to gauge the significance of these new deals without knowing more details.
Notably, Proof Labs is the primary contract in the US Air Force deal, with BigBear.ai serving as contractor. Furthermore, the contract with the US GSA appears to be very flexible and there is no mention of the minimum contract value. In its latest quarterly conference call, BigBear management indicated it was seeing hesitation among government customers when it came to AI spending, and it’s not clear whether recent wins represent a meaningful departure from that outlook.
