This defense-AI stock is up 50 percent in 6 months: It’s not Palantir

• StockStory Top Pick PLTR +1.91%
• BBAI -4.30%

Defense AI has been perhaps the hottest corner of the market this year, and though Palantir (PLTR) dominates proceedings in the space, another tiny player has been notching eye-popping gains.

BigBear.ai (BBAI) isn’t your usual headline-maker, but the defense analytics company has seen its stock skyrocket 50% in six months.

And despite the insatiable demand for military-grade AI sending its stock parabolic, the stock’s still priced like a Big Mac, even as its national-security footprint gets bigger.

Also, by taking a page from Palantir’s playbook, BigBear continues to land major Army contracts, build its backlog, and post a surprise quarterly profit to boot.

For a business that was once written off as a special purpose acquisition company (SPAC) casualty, its momentum is mighty impressive, to say the least.

The "other" defense-AI player that’s suddenly moving

Before getting into the specifics of what BigBear builds, let's dig into why this relatively small defense-AI outfit is on investors’ radars.

For perspective, the stock has jumped from about $4.14 in late May to roughly $6.34 by November (nearly a 53% gain). Stretch that over a year, and those gains are even mightier at 200%.

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Put simply, BigBear.ai runs a potent decision-intelligence business that fell out of favor with investors shortly after going public via a 2021 SPAC merger (valued at $1.57 billion), MarketWatch reported.

The scrappier analytics shop, though, is now back with a bang after spending a few years rebuilding its core engine off to the side.

BigBear and Palantir: overlapping missions, uneven muscle

Both BigBear.ai and its big brother, Palantir, live in the same world.

Their collective goal is to ensure agencies can make sense of often chaotic data and turn it into actionable decisions.

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However, they tackle their missions differently.

BigBear bills itself as a more “decision intelligence” player, spearheading modular tools that plug into existing systems. On the flip side, Palantir pushes full-blown, end-to-end platforms running at a massive scale.

• BigBear’s core products: Boasts the “Observe, Orient, Dominate” suite of AI tools that pull in enormous amounts of raw data and turn it into usable insights for planners and analysts on the battlefield.

• BigBear’s core clientele and contracts: Primarily public-sector focused, with core clientele including the U.S. Defense Intelligence Agency, Department of Defense, and federal agencies, as well as some contribution from logistics and aerospace.  Major contract wins include a slew of small- to mid-sized contracts, including a 3.5-year, $13.2 million award to expand the Pentagon’s ORION force-management analytics system.

• Palantir’s core products: Gotham for government intelligence and defense analytics, Foundry for data integration and analytics for commercial and industrial clients, and the newer Artificial Intelligence Platform (AIP) for deploying large language models and AI agents inside secure environments.  Collectively, they form an end-to-end stack, covering everything from data preparation to advanced AI/ML and automated decision-making.

• Palantir’s core clientele and contracts: Major government customers (CIA, DoD, law-enforcement agencies), along with allied governments. Additionally, its roster of clients includes the who's who of Fortune 500 companies, including Morgan Stanley and Airbus.

• Scale and positioning: Both companies serve similar purposes, but Palantir is clearly the more entrenched behemoth. It continues to land the sector’s biggest deals, including an extended Army Project Maven, which, according to InsideDefense, pushes its market share of the program above $1 billion.

Key drivers behind BigBear.ai’s surge 

BigBear.ai’s epic run hasn’t come out of nowhere.

Over the past year, the AI upstart has converted pipeline chatter into tangible contracts, backed by an impressive balance sheet, and even swung to a quarterly profit.

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Throw in a major acquisition along with a swelling backlog, and investors finally have real reasons to pay attention.

• A landmark Army win: BigBear has just secured its most prized contract ever, a 5-year, $165 million sole-source award to build out the Army’s Global Force Information Management system.

• A string of new deployments: Other major wins include AI-enabled sensor-fusion work with SMX for Navy UNITAS 2025 drills, airport biometric pilots using its veriScan system at Chicago O’Hare and Nashville, and new security partnerships spread across the Middle East and Latin America.

• A fortified financial runway: BigBear surprised with a Q3 profit ($2.5 million compared to a $15 million loss a year earlier), according to Investing.com, led by a record cash pile of $456.6 million, while reducing its debt load by tens of millions.

• A strategic generative-AI acquisition: The $250 million purchase of Ask Sage adds fresh LLM tools, chatbots, and deployment capabilities, along with an expected $25 million in recurring 2025 sales.

Why Palantir remains the industry’s gold standard

BigBear.ai’s rally is eye-catching, to say the least, but Palantir remains the head honcho in defense AI.

The obvious point is that Palantir operates at a scale BigBear can’t match, with Palantir trailing-12-month sales at nearly $3.9 billion, roughly 30 times BigBear’s size.

The tech giant’s software sits at the epicenter of the Pentagon’s most critical programs, powering everything from the Army’s intelligence backbone to multi-billion-dollar initiatives, including Project Maven.

On top of that, it continues building a full-stack system, extending its reach beyond defense, while handling everything from data cleanup to real-time AI-driven decisions, backed by national security agencies and Fortune 500 giants.

Its financials paint a similar story, with it growing its bottom line at a breakneck speed (over$1 billion in net income), sitting at over $6.4 billion in cash and short-term equivalentswith zero debt.

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This story was originally published by TheStreet on Dec 1, 2025, where it first appeared in the Investing section. Add TheStreet as a Preferred Source by clicking here.