Why BigBear.ai Stock Plummeted This Week

BigBear.ai (NYSE: BBAI) stock got hit hard with sell-offs over the last week of trading. The company's share price ended the stretch down 17.1%, according to data from S&P Global Market Intelligence.

BigBear.ai's valuation saw a big setback in conjunction with the market's renewed focus on macroeconomic risk factors. Nvidia's fourth-quarter report also prompted a wave of sell-offs that drove BigBear.ai and other artificial intelligence (AI) stocks lower.

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BigBear.ai stock sank on macroeconomic concerns this week

Following a series of hotter-concerning macroeconomic indicators last week, macroeconomic risks continued to shape this week's trading. In particular, trade war dynamics added to existing concerns about inflationary pressures. The Trump administration confirmed it was planning on moving forward with new tariffs on Canada and Mexico. Trump's team is also reportedly looking into new restrictions to prevent semiconductors for AI and chip manufacturing equipment from being exported to China.

BigBear.ai's valuation also sank after Nvidia's Q4 report

Nvidia published its fourth-quarter results after the market closed on Wednesday, and the market's reaction to its results and guidance significantly impacted the valuation profiles of other AI stocks. Nvidia posted earnings per share of $0.89 on sales of $39.33 billion, beating the average Wall Street estimate's call for per-share earnings of $0.84 on sales of $38.05 billion.

While valuations for Nvidia and other AI stocks initially rose following the report, sentiment quickly turned bearish. Nvidia's CFO raised concerns that new export restrictions could negatively impact future performance, and the commentary helped spur a big pullback for BigBear.ai and other artificial intelligence stocks.

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