Down More Than 15% This Year, Is BigBear.ai Stock a Bargain Buy?

BigBear.ai (NYSE: BBAI) is a volatile stock to own. In each of the previous two years, its shares more than doubled. But the start to 2025 has been bumpy, to say the least. Shares of BigBear.ai are falling and the stock is down more than 15%.

The business is still growing and has some promising potential as companies invest heavily into artificial intelligence (AI). But there is also some risk, given its persistent losses. Is this an AI stock that you should consider buying today, or is more of a decline likely for BigBear?

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BigBear is growing, but is it enough to win over investors?

There is a lot of promise for BigBear related to AI as its predictive analytics and modeling help companies make smarter, more efficient decisions in their day-to-day operations. It secured government contracts and its rich valuation has me wondering if in the future it may follow in the footsteps of another data analytics stock -- Palantir Technologies. But for it to soar in valuation, what may need to take off first is its growth rate, which remains underwhelming.

BBAI Operating Revenue (Quarterly YoY Growth) data by YCharts

While there has been some volatility in its growth rate, the highest it reached in the past three years was just 22%. And through the first three months of 2025, its revenue only rose by 5% to $34.8 million.

This is not the type of growth investors might expect from a business that should benefit from an uptick in AI-related spending. Without greater consistency, investors are likely to question just how promising the business is and how much value it is adding for its customers.

The company's bottom line isn't showing improvement

Another problem is that BigBear also doesn't look to be making any progress with respect to its bottom line. While the company's operating loss did appear to show a significant improvement in Q1, going from a loss of $98 million in the prior-year period to just a $21 million loss this past quarter, that was primarily due to a goodwill impairment charge of $85 million a year ago; there was no such charge this quarter. And if you strip that out, then the prior-year period's operating loss would have totaled $13 million.

BigBear has been incurring a higher rate of costs both on the administrative side as well as with respect to research and development. There aren't any noticeable signs of improvement in terms of controlling costs. And at this stage, it's difficult to see a path to profitability.

BigBear is a highly speculative stock to own

Many AI stocks have gotten a boost in recent years due to the hype around AI, even if their financials haven't been strong enough to suggest that their businesses are indeed taking off. BigBear certainly falls into that category.

While the company has various AI solutions it says can help businesses improve efficiency and their operations, investors are better off relying on hard numbers to see whether the reality is indeed matching up to the hype. When that isn't the case, you're taking on considerable risk, particularly with a company such as BigBear, which still hasn't shown that it has a sustainable business.

Even though the stock is down this year, it's up more than 150% over the past 12 months; there's a fair bit of optimism still priced into the business due to AI. However, with the U.S. government looking at cost reduction and AI-related spending as a whole being under the microscope this year, it may not get easier for BigBear to grow its business in the near term. And when you factor that in with a poor bottom line, not only do you get a stock that isn't a bargain, but it's also an investment you may be better off avoiding for the foreseeable future.

Until and unless it can drastically produce much-improved financial results, BigBear is likely going to remain a highly volatile and speculative stock to own.

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David Jagielski 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.