To The Moon

The Mild Rise.

On Wed, 05 Mar 2025, $BigBear.ai Holdings(BBAI)$ shares fell as much as -3.0% intraday.

Thankfully, by the time 4pm came around, it closed higher at +1.91%, ahead of the company’s Q4 quarter earnings that will be released after the closing bell on Thursday. (see below)

BBAI has been trending downwards since news broke that the Trump administration directed the Department of Defense (DOD) to cut $50 billion in spending.

This worked out to be about 6% of the total defense budget and in the process, dampened retail sentiment.

The move raises concerns for defense contractors like BBAI, that relies heavily on government contracts.

Quarterly Earnings - Past & Forecast.

• The AI solutions provider has struggled with profitability, posting operating losses for the past 3 quarters.

• For Q3 2024, BBAI’s revenue increased +22% YoY to $41.5 million, and gross margins improved to 25.9% from 24.7%.

• However, net losses widened to $149 million, up from $38 million in the same period the year before.

• According to Koyfin data, for Q4 2024 - Wall Street expects BBAI to report a loss of -$0.05 per share on revenue of $54.61 million.

Finances - Latest.

Lately, BBAI has done the followings to shore up its coffer to ensure business-as-usual :

• It recently restructured its debt, exchanging existing convertible notes for new ones with later maturity dates, easing immediate financial pressure.

• At the end of Q3 2024, BBAI's cash balance was $65.6 million, bolstered by $54 million raised through warrant exercises earlier in the year.

• The company has secured a contract with the DOD for its Virtual Anticipation Network (VANE), an AI-powered system designed to predict and counter adversarial actions. The deal helped boost the stock in recent weeks.

Stockwit - BBAI score card as of 6 Mar 2025

Overall Assessment:

• Retail sentiment on Stocktwits around BigBear.ai’s stock remained in the ‘bearish’ zone as traders remained skeptical. (see above)

The Yay-sayers.

• However, one user suggested the company could see a revenue surge in 2025 due to its multi-year defense contracts.

• Meanwhile, another forecasted that profitability is within reach for the company.

Price Target.

• BBAI has lost over -50% of its value since hitting a two-year high of $10.36 in February 2025.

• Analysts remain divided on the stock. 3 of 5 firms give it a ‘Buy'-equivalent rating, while remaining 2 of 5, maintain a ‘Hold’ stance.

• The average price target of $4.75 suggests a potential upside of +4.7% from current levels.

With earnings due after Thursday’s market close, investors will be closely watching for:

1. Updates on government contracts,

2. Profitability prospects

3. Broader impact of defense budget cuts on BBAI’s business.

My viewpoints: (mine only)

It is not actually Defense budget cut per se (literally).

On 19 Feb 2025, the Pentagon announced a sweeping review of military spending.

This initiative aims to re-allocate approximately $50 billion, or 6% of the projected $876.8 billion defense budget, in FY 2026.

The review is not necessarily a budget cut, but a reallocation of funds from lower-priority programs to areas deemed critical by the current administration for future conflicts.

Meaning, it does not mean that BBAI has been edged out of US Defense projects.

On 14 Dec 2025, I have a post titled “BBAI the next PLTR ? Buy ? Read & Know“ where I have listed the contracts BBAI secured and more importantly, the collaboration project with $Palantir Technologies Inc.(PLTR)$.

For me, BBAI’s prospect looks seemingly “bright” on papers.

So, where does the current bout of pessimism stems from, I have no clues.

BBAI Alternatives.

If direct investment in BBAI seems too “risky”, there are other alternatives via ETFs.

Below are 3 such ETFs with stake in BBAI that an investor could consider.

1. $THEMES GENERATIVE ARTIFICIAL INTELLIGENCE ETF(WISE)$

The Themes Generative Artificial Intelligence ETF consists of 40 holdings that specialize in AI and AI-driven services, data analytics/big data, and natural language processing.

BBAI has a weight of about 12%, making it the fund's largest holding.

Other major holdings in this ETF includes Amazon(AMZN), Palantir Technologies(PLTR)$ and SoundHound AI (SOUN)$, three current hotties.

(2) $Global X Defense Tech ETF(SHLD)$

This ETF has 37 holdings positioned to benefit from the wider adoption of defense technologies.

These include companies that focus on cybersecurity, AI, big data, and building advanced military systems and hardware.

Its largest holdings include PLTR, along with aerospace and defense companies RTX (RTX 0.73%) and Northrop Grumman (NOC 2.24%).

The fund offers a small amount of exposure to BBAI, with the stock accounting for 0.32% of its holdings.

(3) $iShares Micro-Cap ETF(IWC)$

This ETF offers broad exposure to micro-cap companies by investing in companies with a market capitalization of between $4 million & $4.6 billion.

The fund has more than 1,400 holdings, with its largest concentrations in:

• Financial stocks (24%).

• Healthcare (22%).

• Information technology (15%).

Therein lies the “beauty” of the US market, there is always something for every type of investor - big or small, adventurous or conservative. Agree ?

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