12 Best AI Penny Stocks to Buy According to Hedge Funds

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

Number of Hedge Fund Holders: 13

BigBear.ai Holdings, Inc. (NYSE:BBAI) specializes in AI-powered decision intelligence solutions across sectors such as defense, manufacturing, healthcare, and logistics. Their offerings encompass data ingestion, enrichment, processing, machine learning, predictive analytics, and visualization services. Clients include US intelligence agencies, the Department of Defense, and organizations in manufacturing, distribution, and healthcare. BBAI’s technology aids in supply chain management, autonomous systems, and cybersecurity, leveraging advanced AI and machine learning to address complex challenges. The US-based company ranked tenth on our recent list of 10 AI Stocks That Wall Street Is Betting On.

BigBear.ai Holdings, Inc. (NYSE:BBAI) showcased solid growth and financial progress in 2024, reporting a Q4 revenue of $43.8 million, an 8% increase from the previous year. The company demonstrated resilience by improving its financial position through strategic moves, such as exchanging $182.3 million in convertible senior notes maturing in 2026 for those due in 2029. This action, combined with $58 million already converted into equity, significantly strengthened its balance sheet. By the end of 2024, BBAI reported a healthier cash position of $50.1 million and further bolstered its finances with $64.7 million in gross proceeds from warrant exercises in Q1 2025. These measures have led to a dramatic reduction in net debt, decreasing from $150 million to $27 million, and improved the debt-to-cash ratio from 4.0 to 1.2.

Operationally, BigBear.ai Holdings, Inc. (NYSE:BBAI) achieved notable momentum with major contract wins, expanding its backlog to $418 million by the close of 2024—a 2.5x growth compared to the previous year. This growth came with an improved gross margin of 37.4%, up from 32.1%, driven by year-end financial adjustments. However, challenges remain, as the company recorded a net loss of $108.0 million in Q4 2024, primarily due to non-cash valuation changes tied to derivative liabilities. Looking ahead, management projects 2025 revenue in the range of $160 million to $180 million, although it anticipates negative single digit Adjusted EBITDA. Despite these hurdles, the company’s strengthened financial foundation and growing operational base signal promising long-term potential. With at least 13 hedge funds owning the stock, BBAI is one of the best AI penny stocks to buy according to hedge funds.