10 Best Small Cap AI Stocks to Buy According to Short Sellers

4. BigBear.ai Holdings, Inc. (NYSE:BBAI)

Market Cap as of August 26: $430.12 million

Number of Hedge Fund Holders: 9

Short % of Shares Outstanding as of July 31: 6.75%

BigBear.ai Holdings, Inc. (NYSE:BBAI) utilizes AI solutions and provides software to make data-driven decisions across various industries. It specializes in Vision AI, a type that uses computer vision to analyze visual data, like images and videos, and extract insights. The company wants to help customers conveniently gain the ability to adopt Al-powered solutions in an edge computing network topology by 2025.

In Q2 2024, the company reported $39.78 million in revenue, with a 3.44% year-over-year growth. The loss per share was $0.05, lower than estimates by $0.02.

Earlier this year, the company acquired Pangiam Intermediate Holdings, LLC to enhance its capabilities in computer vision and biometrics, particularly in sectors such as national security, supply chain management, and digital identity. The deal combined BigBear.ai Holdings, Inc.’s (NYSE:BBAI) existing computer vision technologies with Pangiam’s expertise in facial recognition and image-based unusual pattern detection, creating a strong Vision AI portfolio.

In Q2, it partnered with Heathrow Airport to improve its security, and operations through advanced AI technologies. Later, it acquired a new $7.7 million, 7-month contract with the US Army, and an $8.5 million, 6-month extension on another US Army project, solidifying BigBear.ai Holdings, Inc.’s (NYSE:BBAI) role as their prime contractor.

A recent contract with the Federal Aviation Administration (FAA) caused the company’s stock price to go up by 35% in August. As evident from such partnerships, the company has made a big name for itself in the defense space and if it continues executing like this, it will grow its market share meaningfully over the next several years. BBAI is one of the top small-cap AI stocks to buy according to short sellers. The stock was held by 9 hedge funds at the close of the second quarter of 2024.