Investors are closely watching the AI defense sector following recent earnings reports from Palantir (PLTR) and BigBear.ai (BBAI). While both stocks moved lower after the reports, the results showed a big difference in growth, profits, and overall business momentum.
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Palantir continues to benefit from the rapid rise in AI spending, while BigBear.ai is still struggling to turn that demand into steady revenue growth. Following the earnings reports, investors are now looking at which stock offers the better value for the rest of 2026.
Palantir Continues to Pull Ahead
Palantir once again delivered a strong quarter. The company reported revenue of $1.63 billion, up 85% from a year ago and well above analyst estimates of $1.54 billion. Profit also came in ahead of expectations, with adjusted earnings of $0.33 per share versus Wall Street forecasts of $0.28.
The strong results were driven by growing demand for Palantir’s AI platform across both government and commercial customers. Management also raised its full-year 2026 revenue guidance to $7.66 billion, showing confidence that demand for its AI products remains strong.
Still, the stock slipped after earnings as some investors worried about valuation. One such analyst is Gil Luria of DA Davidson, who lowered his price target to $165 from $180 and kept a Neutral rating. He pointed out that Palantir trades at a significant premium compared to peers, raising questions about how much upside is left. Even after the pullback, Palantir remains one of the most expensive software stocks on the market, and expectations are already extremely high.
BigBear.ai Still Faces Growth Challenges
BigBear.ai painted a very different picture. The company reported revenue of $34.4 million, slightly above estimates of $33.6 million. However, sales were still down 1% from the same period last year. That weak growth disappointed investors at a time when many AI companies are posting strong expansion numbers.
The bigger concern came from earnings. BigBear.ai reported a loss of $0.12 per share, wider than Wall Street expectations for a loss of $0.08 per share. Rising operating costs, including expenses tied to the Ask Sage acquisition, added pressure to profits.
There were a few positive signs in the report. Gross margins improved to 34%, showing the company is becoming more efficient and shifting toward higher-margin software and AI products. However, investors appear to want stronger revenue growth before becoming more bullish on the stock.
Wall Street’s Take on PLTR and BBAI Stocks
We used the TipRanks Stock Comparison Tool to see how Wall Street views Palantir and BigBear.ai following their latest earnings reports. Both stocks currently carry a “Moderate Buy” consensus rating from analysts. However, Palantir stands out with the higher analyst price target upside of about 37%, compared to nearly 29% for BigBear.ai.
Conclusion
Right now, Palantir clearly has the stronger business momentum. The company is growing rapidly, expanding profits, and winning larger AI contracts as enterprise demand accelerates. Meanwhile, though BigBear.ai has potential, it remains much earlier in its growth story. Slower sales growth and continued losses make the stock a riskier bet compared to Palantir.