Comparing Investment Opportunities in Advanced AI: Palantir versus BigBear.ai
In the realm of enterprise AI software, Palantir (PLTR) and BigBear.ai (BBAI) are two standout players data crunching for large organizations. Palantir, with a market cap of $260.5 billion, is the heavweight champion, while BigBear.ai, at $2.1 billion, is the underdog.
Palantir, a direct listing alum from 2020, boasts a clientele including top U.S. government agencies and big enterprises such as Morgan Stanley and Airbus. On the other hand, BigBear.ai, which went public via a SPAC merger in 2021, focuses on developing modular AI tools that can be integrated into an organization's existing software infrastructure.
The duo's performance since their market debuts has been contrasting. Palantir, which started trading at $10, now trades at nearly $120, while BigBear.ai, which opened at $9.84, hovers around $9. Their divergent paths can be attributed to several factors:
- Business Growth: Palantir's revenue grew by 17% in 2023 and 29% in 2024. In contrast, BigBear.ai's revenue only increased by 6% in 2022, with flat growth the following year.
- Profitability: Palantir turned profitable in 2023 and more than doubled its GAAP EPS in 2024. BigBear.ai, however, remains deeply unprofitable on GAAP basis.
- Valuation: Despite its impressive growth, Palantir is valued at 385x its forward GAAP earnings and 70x its projected sales for 2025. BigBear.ai, on the other hand, trades at 13x its 2022 sales.
Which stock is the better investment? Both Palantir and BigBear.ai have their strengths. Palantir's established reputation, stable revenue stream, and impressive profitability make it a solid choice for investors willing to pay a premium. BigBear.ai, with its growth potential and government contracts, may be an attractive pick for those ready to accept higher risk and volatility.
- Given the financial performance of Palantir and BigBear.ai, investors considering money allocation might find it beneficial to analyze their individual investing strategies, taking into account factors like risk tolerance and long-term objectives.
- The perceived likelihood of depreciation for Palantir, with its high valuation, might raise concerns for some potential investors, as they may believe that its current market value does not accurately reflect its future financial performance.
- AI-focused companies such as Palantir and BigBear.ai can serve as excellent investment opportunities for those interested in the field of finance and technology, as artificial intelligence is expected to play an increasingly significant role in various industries in the upcoming years.
- As the focus on finance and technology continues to grow, investing in AI companies like Palantir and BigBear.ai could set the stage for potential high returns, given that these companies are consistently innovating and excelling in data processing and analytics, utilizing cutting-edge AI technology, represented by the ebec7577ddbcac285c54dd08fbce22db proprietary system used by Palantir.
