Why BigBear.ai Stock Is Skyrocketing Again Today

Source The Motley Fool

BigBear.ai (NYSE: BBAI) stock is seeing another day of huge gains in Friday's trading. The company's share price was up 20% as of 12:15 p.m. ET and had been up as much as 26.9% earlier in the daily session.

While there does not appear to be any direct, business-specific news that's pushing BigBear.ai stock higher today, the company's share price may is climbing in conjunction with the news that Palantir Technologies (NASDAQ: PLTR) has formed a new partnership with Booz Allen Hamilton to accelerate U.S. defense technologies. BigBear has a partnership with Palantir, and a narrative connection has recently emerged between the two stocks that has helped push the latter company's valuation higher.

BigBear.ai stock gets a boost from Palantir's new partnership

Palantir and Booz Allen Hamilton published a joint press release today announcing that they were teaming up to promote U.S. defense mission innovation. Palantir stock is up 6% as of this writing on the news.

BigBear.ai and Palantir had previously announced a partnership to advance machine learning technologies and integrate some of the two company's respective capabilities to "extend the operating system for the modern enterprise with data and AI that provide advice and other actionable insights for complex business decisions." While it's possible that contract wins for Palantir will wind up having significant carryover benefits for BigBear, that won't be true in every case.

What's next for BigBear.ai stock?

BigBear.ai stock has gotten a boost this week after The Economic Times published a report raising the possibility that the company's stock could see performance gains comparable to the incredible run that Palantir stock has enjoyed this year. As of this writing, Palantir stock is up roughly 343% across 2024's trading.

But BigBear.ai investors may want to pump the brakes a bit. The company's share price appears to be making big moves on meme stock momentum, as well as expectations that the stock could be "the next Palantir." While it's possible that BigBear will serve up some big business wins that help push its valuation above current levels, recent gains for the stock appear to be disconnected from fundamental business performance and outlook conditions.

If you're thinking about buying BigBear, you should approach the stock with the understanding that it's a high-risk investment.

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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Palantir Technologies. The Motley Fool recommends Booz Allen Hamilton. The Motley Fool has a disclosure policy.

Disclaimer: For information purposes only. Past performance is not indicative of future results.
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