U.S. Government Supported AI Stocks of 2025 Revealed
In the realm of software acquisition for the U.S. government, two key players have emerged: Palantir Technologies and BigBear.ai.
Palantir Technologies, a significant player in AI for the U.S. government, has secured multi-billion-dollar contracts, such as a potential $10 billion deal with the Army and a $1.28 billion extension for the Department of Defense's Maven Smart System. These agreements provide Palantir with substantial revenue visibility and a broad government footprint, reaching beyond defense to projects like the Immigration Lifecycle Operating System for ICE. In Q1 2025 alone, Palantir reported $487 million in government revenue with gross margins near 80%, showcasing strong profitability and scale [1][2][3][4].
On the other hand, BigBear.ai operates more as a niche player, focusing on specialized contracts. While active in overlapping sectors like defense and border security with AI and decision intelligence platforms (e.g., ConductorOS and biometric systems like Pangiam), BigBear.ai's contracts tend to be smaller in scale, such as a $165 million U.S. Army GFIM-OE deal, a $13.2 million Joint Chiefs of Staff contract, and partnerships for AI autonomous Army drones and airport biometric deployments. BigBear.ai's revenue has declined by 18% in Q2 2025, and it faces challenges in profitability with gross margins under 30% and ongoing losses [1][3][4].
| Aspect | Palantir Technologies | BigBear.ai | |--------------------------|--------------------------------------------|-------------------------------------------| | Contract Scale | Multi-billion-dollar multi-year contracts | Smaller, niche-focused contracts (tens to hundreds of millions) | | Government Focus | Broad: Defense, immigration, multiple agencies | Narrower: Defense AI, border security, national security-specific projects | | Revenue & Profitability | $487M in quarterly government revenue; ~80% gross margin; profitable | $160M annual revenue; <30% gross margin; continuing losses | | Market Position | Established leader with broad client base | Smaller-scale competitor with niche offerings | | Contract Backlog | Consolidation of multiple contracts; large, long-term deals | $380 million backlog, significant but limited in scale | | Growth Trend (2025) | 48% revenue growth in Q2, expanding footprint | 18% revenue decline in Q2, some international expansions |
The key differences between the two companies lie in their contract scale, government focus, revenue and profitability, market position, contract backlog, and growth trend. Palantir's ability to consolidate contracts and leverage AI across defense and other government sectors underpins its dominant role in SWP. BigBear.ai's approach is more specialized, targeting real-time AI orchestration and biometric applications with fewer, smaller contracts, which leads to more revenue volatility and profitability challenges [1][2][3][4].
While Palantir is the priciest software-as-a-service stock among the companies mentioned, investors may find a more reasonable entry point for BigBear.ai, which is popular among retail investors hoping it becomes the "next Palantir." Notable AI stock companies include Nvidia, Advanced Micro Devices, Broadcom, Taiwan Semiconductor Manufacturing, Microsoft, Amazon, and Alphabet.
[1] [Source 1] [2] [Source 2] [3] [Source 3] [4] [Source 4]
- Investing in the AI sector, one might consider the financial performance of Palantir Technologies and BigBear.ai. Palantir reported $487 million in government revenue and maintains gross margins near 80%, showcasing strong profitability [1][2][3][4].
- In contrast, BigBear.ai faces challenges in profitability with gross margins under 30% and ongoing losses, despite securing contracts like the US Army GFIM-OE deal and Joint Chiefs of Staff contract [1][3][4].
- As both companies operate in the overlap of technology, finance, and investing, the development of artificial intelligence and its application in areas like defense, border security, and decision intelligence platforms could significantly impact their future revenue streams and market position [1][2][3][4].
