'Mini-Palantir' BigBear.ai acquires generative AI platform for defense; stock soars

Shares of BigBear.ai, a mid-cap company whose AI-based products and services support data-driven decision-making for businesses and government agencies, rose more than 6% yesterday, November 11, after the company reported solid earnings and announced an acquisition that Barron’s believes could strengthen its ability to compete with Palantir.

BigBear.ai announced that it has signed a definitive agreement to acquire Ask Sage, a fast-growing generative AI platform built specifically for defense, homeland security, and other highly regulated sectors, for $250 million. The transaction is expected to close in the fourth quarter or the first quarter of next year, subject to approvals.

The announcement came alongside the company’s third-quarter earnings. Although revenue fell 20% year over year to $33.1 million, BigBear.ai reported net income of $2.5 million, marking its first quarterly profit since 2023, versus a net loss of $15.1 million a year earlier. The loss per share narrowed to $0.03, half of analysts’ expectations of $0.07, according to Barron’s.

Investors responded positively: BigBear.ai shares rose 6.1% yesterday to $6 on the New York Stock Exchange and have added another 4% in early trading today.

The deal could enhance the ability of BigBear.ai, described as a "mini-Palantir," to compete with Palantir Technologies, “the undisputed leader in defense software,” Barron’s wrote. According to Cantor Fitzgerald analyst Jonathan Ruykhaver in a research note, the move expands the market BigBear.ai can address and “strengthens its position as a leading provider of AI, computer vision, and decision advantage solutions for national security.”

Ruykhaver reiterated his “buy” recommendation and raised his target price for the shares from $6 to $7 per share, implying upside of about 17% from the November 11 close.

While BigBear.ai is unlikely to match Palantir’s scale in winning billion-dollar defense contracts, Ruykhaver notes it could secure smaller, specialized projects, such as biometric entry-exit systems for U.S. border control and security solutions for the 2026 FIFA World Cup and 2028 Olympic Games in Los Angeles.

BigBear.ai, which has remained unprofitable since going public in 2021, continues to focus on achieving sustainable profitability. The company expects 2025 revenue between $125 million and $140 million, which would be its lowest fiscal-year revenue as a public company, down from $158 million in 2024. It has cited lower volumes on certain military programs.

According to H.C. Wainwright analyst Scott Buck, individual programs should eventually have less impact on quarterly results as the business scales up. The acquisition of Ask Sage, which is expected to generate annual recurring revenue of about $25 million in 2025, up sixfold from a year ago, may be part of that trajectory. BigBear.ai’s full-year guidance does not yet factor in Ask Sage.

“We believe BigBear.ai remains well positioned to be a beneficiary from the current administration’s priorities,” Buck wrote, reiterating a "buy" rating for the stock and an $8 per share target price, for 33% upside from the November 11 close.

The AI translation of this story was reviewed by a human editor.