Shares of server and storage resolution specialist BigBear.ai (NYSE: BBAI) charged sharply larger on Tuesday, surging as a lot as 20.9%. As of 11:52 a.m. ET, the inventory was nonetheless up 19.1%.
The catalyst that despatched the artificial intelligence (AI) specialist larger was some bullish commentary in a world publication that in contrast it favorably to information mining and AI specialist Palantir Applied sciences (NASDAQ: PLTR).
Fierce conjecture
BigBear.ai has the potential to develop into the subsequent Palantir, based on The Financial Occasions. Because the firm is way smaller and has a a lot decrease market cap, it has the potential to be a giant winner for traders, based on the report. Certainly, with a worth of simply $668 million, BigBear is way smaller than Palantir at $159 billion (as of this writing).
BigBear.ai has gotten a number of consideration for the reason that introduction of generative AI early final yr. The corporate provides decision-intelligence options enhanced by AI and machine studying to assist enterprise leaders make knowledgeable choices. If that sounds quite a bit like what Palantir does, there are similarities.
As my colleague Dan Victor pointed out, “Each focus on AI and machine studying cloud-based software program that helps organizations analyze complicated information units to realize predictive insights.” He additionally cites an “ongoing strategic partnership” with Palantir that might profit BigBear.ai.
Palantir’s Synthetic Intelligence Platform (AIP) is gaining broad acceptance throughout enterprise and authorities prospects, famous for its capability to supply a variety of options to on a regular basis enterprise issues. For its half, BigBear.ai remains to be targeted on smaller, extra specialised options, limiting its present upside.
So, is BigBear.ai the subsequent Palantir?
To be clear, a number of issues must go proper for BigBear to make the bounce to the large leagues. Within the third quarter, the corporate generated income that elevated 22% to $41.5 million, leading to a loss per share of $0.05. Examine that to Palantir’s income of $726 million and earnings per share of $0.06, and the obvious distinction comes into focus.
Nevertheless, at roughly 3 occasions ahead gross sales, BigBear is by far the higher discount, in comparison with 46 occasions ahead gross sales for Palantir. That stated, its smaller measurement and lack of earnings make BigBear.ai a extra dangerous proposition, so any funding must be sized appropriately.
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Danny Vena has positions in Palantir Applied sciences. The Motley Idiot has positions in and recommends Palantir Applied sciences. The Motley Idiot has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the writer and don’t essentially replicate these of Nasdaq, Inc.
