We recently compiled a list of the 10 AI Stocks That Wall Street Is Betting On. In this article, we are going to take a look at where BigBear.ai Holdings, Inc. (NYSE:BBAI) stands against the other AI stocks.
Elon Musk has been pressing hard to halt OpenAI’s transition into a for-profit entity. But the high-stakes legal battle isn’t seemingly working out in his favor. In the latest news, a U.S. judge has denied the billionaire’s request for a preliminary injunction to pause OpenAI’s transition to a for-profit model. However, she did agree to a fast-track trial in the fall of this year to address his claims against OpenAI and its CEO, Sam Altman.
According to U.S. District Judge Yvonne Gonzalez Rogers in Oakland, California, Musk doesn’t have “the high burden required for a preliminary injunction” to block the conversion of OpenAI. However, Rogers wrote in the order that she wanted to resolve the lawsuit quickly given “the public interest at stake and potential for harm if a conversion contrary to law occurred.”
READ ALSO: 10 Hot AI News Updates Analysts are Monitoring and 12 AI Stocks Making Headlines: Latest News and Ratings
The filing noted that even though the plaintiffs “failed to meet their burden of proof for the extraordinary relief requested,” other aspects of Musk’s lawsuit against OpenAI can proceed. Currently, OpenAI is overseen by a non-profit parent that Elon Musk recently offered to buy. However, the company’s board unanimously rejected the $97.4 billion offer to buy OpenAI.
Since Musk has become Altman’s chief adversary, he has been putting obstacles in OpenAI’s path to becoming a for-profit entity, claiming that the AI startup will deviate from its original mission of developing artificial intelligence for the benefit of humanity. OpenAI and Altman have denied these accusations, stating that the shift is essential to raise capital and effectively compete in the rapidly evolving AI industry.
OpenAI has welcomed the judge’s recent decision, stating that the lawsuit by Musk, who launched rival startup xAI in 2023, has “always been about competition”. Meanwhile, Marc Toberoff, a lawyer for Musk, said they were pleased the judge “offered an expedited trial on the core claims driving this case”.
“We look forward to a jury confirming that Altman accepted Musk’s charitable contributions knowing full well they had to be used for the public’s benefit rather than his own enrichment.”
-Marc Toberoff.
For this article, we selected AI stocks by going through news articles, stock analysis, and press releases. These stocks are also popular among hedge funds. The hedge fund data is as of Q4 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A closeup of a computer server rack surrounded by a CAT5 network of cables.
BigBear.ai Holdings, Inc. (NYSE:BBAI)
Number of Hedge Fund Holders: 13
BigBear.ai Holdings, Inc. (NYSE:BBAI) is an artificial intelligence specialist that provides decision intelligence solutions. On March 6, the company announced its financial results for the fourth quarter of 2024. The company reported Q4 EPS of ($0.43), $0.37 worse than the analyst estimate of ($0.06). Revenue for the quarter came in at $43.8 million versus the consensus estimate of $53.84 million. The company stated that the 8% increase in revenue has been primarily due to additional revenue related to Department of Homeland Security and Digital Identity awards. Looking ahead, BigBear.ai Holdings, Inc. (NYSE:BBAI) sees FY2025 revenue of $160-180 million, falling short of the consensus of $193.9 million. The company has noted that in the event of a potential U.S. government shutdown or shift in national security priorities, its 2025 outlook would be impacted and require a guidance review.
“2024 was a pivotal year for the business. We demonstrated momentum through major contract wins, expanding our backlog and growing our pipeline, maturing our technology portfolio, and restructuring our debt to strengthen our financial position for the long term. These efforts were driven by strong execution from our team.”
-Kevin McAleenan, Chief Executive Officer, BigBear.ai.
Overall BBAI ranks 10th on our list of the AI stocks Wall Street is betting on. While we acknowledge the potential of BBAI as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. 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.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.
