BigBear.ai Holdings (BBAI), a provider of artificial intelligence (AI)-powered decision intelligence solutions, reported disappointing second-quarter results and slashed its full-year revenue outlook, citing disruptions in federal contracts from efficiency efforts. While BBAI stock has seen a steep selloff since the Q2 earnings, Wall Street is cautiously bullish due to the long-term growth potential of the AI company and sees attractive upside potential from current levels.
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BBAI reported an 18% year-over-year decline in its Q2 revenue to $32.5 million. This made investors question the stock’s elevated valuation, especially at a time when another AI stock with defense exposure, Palantir Technologies (PLTR), delivered stellar growth and saw its quarterly revenue hit the $1 billion mark for the first time.
Analysts Are Optimistic on BBAI Stock
While critics are concerned about dismal growth and execution, BBAI bulls remain optimistic about the road ahead, given robust opportunities amid the ongoing AI boom.
For instance, Cantor Fitzgerald analyst Jonathan Ruykhaver reiterated a Buy rating on BigBear.ai stock following the Q2 print and slightly raised his price target to $6 from $5. The 5-star analyst stated that BBAI showcased strong progress on key initiatives, including core product development and balance sheet improvements. He highlighted that the company ended the quarter with a backlog of $380 million, reflecting a 42.9% year-over-year growth.
Ruykhaver is bullish on the various potential catalysts expected to drive near- to long-term growth, including the Pangiam acquisition to boost vision AI and the transition to target higher-margin commercial customers. “We believe BigBear.ai is well-positioned to establish itself as a leading AI/ML platform provider in the intelligence space,” concluded the analyst.
Likewise, H.C. Wainwright analyst Scott Buck reaffirmed a Buy rating on BBAI stock but lowered the price target to $8 from $9. Buck argued that while BBAI’s Q2 results were weak, it was not surprising, given that peers in the defense space also experienced program delays. He expects improvement in revenue visibility as the company progresses into 2026.
Longer term, Buck believes that BigBear.ai is well-positioned to benefit from the One Big Beautiful Bill, which significantly increases investment in areas aligned with the company’s core competencies.
Is BBAI a Good Stock to Buy?
Currently, Wall Street has a Moderate Buy consensus rating on BigBear.ai Holdings stock based on two Buys and one Hold recommendation. The average BBAI stock price target of $5.83 indicates 15.5% upside potential from current levels. Despite the recent pullback, BBAI stock is up about 14% year-to-date.
