Forget BigBear.ai: This SaaS Rocketship Has a Far Stronger Growth Story

Shares of BigBear.ai (NYSE: BBAI) and ServiceTitan (NASDAQ: TTAN) have both been hit hard recently by shifting investor sentiment around artificial intelligence (AI), but for different reasons.

In the past six months, while the broad-market S&P 500 index has gained 9.8% and the tech-heavy Nasdaq-100 has risen by 10.6%, ServiceTitan has slumped by 23.6% and BigBear.ai is down 21.4%.

BigBear.ai's software provides AI decision-intelligence tools, so under other circumstances, it could have been riding the AI wave upward. However, it's facing stiff competition in its narrow niche, and its revenues are sliding. ServiceTitan offers a business management platform for companies in the skilled trades, and its sales are growing, but it appears that investors are pessimistic about its outlook due to the expected impact of AI on software-as-a-service (SaaS) companies as a group.

All that said, I think ServiceTitan could be a promising stock to buy now, and a much better investment than BigBear.ai for patient tech stock investors.

ServiceTitan is growing -- BigBear.ai is not

BigBear.ai's revenue slumped by 20% year over year in the third quarter, and its gross margin contracted by 3.5 percentage points to 22.4%. It has lost money for the past four years and has missed analysts' estimates for earnings per share in three out of its past four reported quarters. The stock's down by about 40% from where it traded when the company went public in December 2021.

Meanwhile, ServiceTitan is growing fast. In December 2025, the company reported impressive financial results for its fiscal 2026 third quarter. Highlights from the period, which ended Oct 31, included 25% revenue growth and an adjusted operating margin of 8.6%, up from 0.8% in the prior-year period.

It brought in $249 million of revenue in the quarter, which means it now has an annual revenue run rate of nearly $1 billion. The stock rose about 10% on Dec. 5, the day after it reported its fiscal Q3 results. But now, it's down by about 16% from that near-term peak.

ServiceTitan is still unprofitable, but it has beaten analysts' earnings expectations for the past four quarters. I believe that it's undervalued: A fast-growing company like this deserves a higher share price.

ServiceTitan has a strong business model

BigBear.ai relies heavily on government contracts and defense spending. However, it's facing tough competition from peers, and it's struggling to grow. It seems unlikely to deliver a turnaround or achieve sustained profitability anytime soon.

ServiceTitan, by contrast, provides an operating system for businesses in the commercial and residential trades. It gives contractors like plumbers, carpenters, and electricians an easy technology platform to manage all the back-office details. Think of it like Salesforce for small businesses in the skilled trades.

Image Source: Getty Images.

If you've ever hired a plumber or electrician, you know how hard it can be to schedule one. Many such contractors run their businesses without much administrative support, and using old-school analog tools -- scheduling appointments via phone calls, getting customer signatures on paper contracts, and sending paper invoices by mail. They and their teams may not have the time or desire to become experts in using complex customer relationship management systems.

ServiceTitan provides these business owners with a platform of software tools already customized for their types of operations, laid out in a way that makes sense for them. I believe this is a strong, sustainable business model. The company is serving an underserved market, and its revenue growth shows it.

So why the investor skepticism?

So if ServiceTitan is growing, why are investors skeptical? It seems that the stock has gotten caught up in a broader narrative that AI is going to sap business from SaaS companies. The premise is that soon, businesses won't need to pay for many of the software subscriptions they have today; they'll just use AI tools to make their own similar software. Customer relationship management specialist Salesforce is a prominent example of SaaS stocks that have been under pressure due to this narrative -- it's down 32% in the past year.

However, I don't believe AI will actually prove a threat to ServiceTitan's business. The company serves a market that needs dedicated solutions. Most plumbers, carpenters, roofers, and house painters are busy enough doing their actual day jobs. I expect that neither they nor their small office staffs are going to want to spend time figuring out how to "vibe code" their own online billing systems.

ServiceTitan's price-to-sales (P/S) ratio is 9.0 -- a better bargain than BigBear.ai's P/S of 12.3. BigBear.ai might not emerge from its current downtrend, even if AI does not wind up destroying the SaaS industry. But I believe that ServiceTitan has a bright future either way, and that its stock is a promising buy now.

Ben Gran has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Salesforce. The Motley Fool recommends ServiceTitan. The Motley Fool has a disclosure policy.