Why BigBear.ai Stock Is Plummeting Today

After big gains in the previous two daily sessions, BigBear.ai (NYSE: BBAI) stock is pulling back in Thursday's trading. The stock had fallen 12.8% as of 2:15 p.m. ET. At the same point in the day's trading, the S&P 500 (SNPINDEX: ^GSPC) was down 1.1%, and the Nasdaq Composite (NASDAQINDEX: ^IXIC) had declined 1.4%.

BigBear.ai surged higher following the company's third-quarter report on Monday, but it's getting hit with sell-offs today in response to valuation concerns surrounding artificial intelligence (AI) stocks. The company's share price is also being negatively impacted by news that some key macroeconomic data won't be arriving due to the government shutdown.

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BigBear.ai stock is getting hit hard in a tough day for the market

Stocks are facing a session of aggressive sell-offs today. Investors have continued to move out of heavily growth-dependent AI stocks due to fears that a valuation bubble may have formed in the category.

Investors hoping for another interest rate cut from the Federal Reserve when it meets in December also got some troubling news. Due to the protracted government shutdown, some important reports on macroeconomic data will either be showing up short on data or not arriving at all. While a jobs report for October could still arrive, it's expected to lack data on unemployment. Even more troubling, it seems that there won't be an official read out on last month's inflation -- and it's possible November's reporting could also be impacted.

The Fed is relying on employment and inflation data and other factors in order to determine its course on rate cuts. With less information to work with, there's an elevated risk that the central banking authority could vote not to cut rates next month.

What's next for BigBear.ai?

BigBear.ai is coming off a quarterly report earlier this week that the market was decidedly bullish on. Sales and earnings for the third quarter topped Wall Street's expectations, and the company also announced that it would be acquiring Ask Sage in a $250 million deal.

Investors are betting that the Ask Sage acquisition will strengthen BigBear.ai in generative artificial intelligence and help the company start winning more government contracts. The integration could wind up paying off in a big way, but BigBear.ai's sales have still been declining at a rapid pace lately -- and the business has a lot of proving to do.

Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.