Here's Why I Wouldn't Touch BigBear.ai Stock With a 10-Foot Pole

I've never understood why the management of artificial intelligence (AI) company BigBear.ai (NYSE: BBAI) would pick a ticker symbol that looks like it's pronounced "buh-bye!"

But it's fitting, because that's what I think investors ought to be saying to this much-hyped security-focused AI stock.

Here's why I wouldn't touch BigBear.ai with a 10-foot pole.

Image source: Getty Images.

Spending up, revenue down

Spending across the AI sector has skyrocketed over the last three years, and it's expected to grow even more in the coming year. AI hyperscalers spent an estimated $197 billion on AI capital expenditures (capex) in 2024. That increased to an estimated $405 billion in 2025. Wall Street's consensus estimate for the hyperscalers' 2026 spend is $527 billion, and some estimates suggest it could even reach $700 billion.

But despite that ever-increasing stream of money being poured into AI, BigBear.ai's revenue has actually dropped by 10.3% over the last three years. And that doesn't seem to be a problem shared by peer companies. Revenue at fellow security-related AI company Palantir Technologies has gone up by 96.3% over the same period.

That should be enough to worry any investor. But there's plenty more for BigBear.ai investors to worry about.

Image source: Getty Images.

More shares, less value

Owning a share of stock is essentially owning a piece of a pizza. Put your piece together with all the other pieces, and you get the whole pie. So when a company like BigBear.ai issues more shares of stock, it's basically cutting the pizza into more -- and thinner -- slices. Suddenly, your piece of pizza is thinner, and therefore less valuable.

Since 2024, BigBear.ai's share count has nearly tripled, from 156.8 million shares to 436.6 million shares. That means investors who bought shares before 2024 have already seen their shares drop in value by about 64%. But it could be about to get a lot worse.

Because the 436.6 million outstanding shares are getting close to the company's fixed cap of 500 million shares, management held a proxy vote on Thursday to amend the company's Certificate of Incorporation to raise that cap from 500 million shares to 1 billion shares. The results of that vote are still outstanding, but proxy firms ISS and Glass Lewis both recommended voting for the proposal, meaning current shareholders' stock value could be more than halved if all those new shares are issued.

In a letter to shareholders, CEO Kevin McAleenan said the ability to issue more shares is critical for the company "to make important acquisitions, fund product development and strengthen our balance sheet." In other words, if the vote goes his way, shareholders will almost certainly see their shares diluted, and if it doesn't, the company will be hamstrung in its efforts to grow and compete. Neither one sounds like an attractive option to me. I'd sooner just say "buh-bye."

John Bromels has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Palantir Technologies. The Motley Fool has a disclosure policy.