1. BigBear.ai Holdings Inc. (NYSE:BBAI)
Number of Hedge Fund Holders: 9
BigBear.ai Holdings Inc. (NYSE:BBAI) provides AI-powered, decision intelligence solutions for defense, manufacturing & warehouse operations, healthcare & life sciences, with a focus on national security, supply chain management, and digital identity & biometrics. The company aims to simplify AI adoption in edge networks by 2025, allowing customers to deploy AI closer to IoT devices.
One of the company’s major customers, Virgin Orbit, went bankrupt in 2023, limiting its revenue streams. This is a particularly concerning development since it heavily relies on just 3 customers (49% of 2023 revenue). These long-term contracts expire between 2024 and 2026, and renewal is uncertain. Revenue growth could slow if it doesn’t acquire new customers before then.
Through the acquisition of Pangiam earlier this year, the company enhanced its capabilities in computer vision and biometrics, particularly in sectors such as national security, supply chain management, and digital identity. Later, it partnered with Heathrow Airport to use AI for improved security and operational efficiency.
Additionally, BigBear.ai Holdings Inc. (NYSE:BBAI) secured a new $7.7 million contract with the US Army and extended another project for $8.5 million over six months, solidifying its position as a key prime contractor for the military. This strong performance caused a 35% stock price surge in August following a recent contract win with the Federal Aviation Administration (FAA).
The company made $39.78 million in revenue, up 3.44% year-over-year in Q2 2024. Yet, it has faced challenges in securing contracts recently. The company reported difficulties in its latest quarter, which has impacted its stock performance.
In July, BigBear.ai’s Troy™ achieved “Awardable” status, making it available for purchase through the CDAO’s Tradewinds Solutions. As one of its top products, Troy™ is poised to revolutionize cybersecurity. Overall, the company is well-positioned for growth as it integrates AI across its businesses, and remains dominant in defense. The target market is expected to triple by 2028 due to AI adoption.
As we acknowledge the growth potential of BigBear.ai Holdings Inc. (NYSE:BBAI), our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than BBAI but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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