Better Artificial Intelligence Stock: BigBear.ai vs. C3.ai

Globe and Mail

4 hours ago

Nations are rushing to embrace artificial intelligence (AI), and for good reason. As Nvidia CEO Jensen Huang explained, "Countries around the world are recognizing AI as essential infrastructure -- just like electricity and the internet."
The Trump administration has signaled that the U.S. intends to lead the world in AI. Two businesses helping the government achieve this goal are BigBear.ai (NYSE: BBAI) and C3.ai (NYSE: AI).
Both companies have delivered AI solutions to the likes of the U.S. Army and Department of Defense. But if you had to choose between the two, which stock is the better AI investment for the long haul? Here's a look at each business to answer that question.
BigBear.ai's pros and cons
BigBear.ai delivers various AI solutions that focus on national security and infrastructure. For example, it provides facial recognition software to many airports to screen passengers for security risks, and it's helping the U.S. Navy construct submarines with its AI-enhanced shipbuilding software.
BigBear.ai's business delivered $34.8 million in the first quarter, a 5% year-over-year increase. It also benefited from the exercise of 2024 warrants to the tune of $64.7 million in gross proceeds.
The company experienced leadership changes this year. Its CFO departed in June, and it gained a new CEO, Kevin McAleenan, in January. McAleenan served as Acting Secretary of the U.S. Department of Homeland Security during the first Trump administration, so his experience could prove beneficial to BigBear.ai's government business.
That said, the company faces some challenges. BigBear.ai is not profitable. Its Q1 net loss totaled $62 million, as some of its operating expenses increased year over year.
BigBear.ai also possesses substantial debt. Its Q1 total liabilities of $198.5 million included long-term debt of $100.6 million, and that was after the amount was reduced by $58 million through voluntary conversions of its 2029 convertible notes. Q1 assets totaled $396.3 million.
Diving into C3.ai
C3.ai offers ready-made and custom AI solutions. Government customers include the U.S. Air Force, the Marine Corps, and the National Science Foundation. It also boasts a sizable non-government business with clients such as ExxonMobil and Dow.
The company leverages partnerships to expand its sales reach. Partners closed 193 agreements in C3.ai's 2025 fiscal year, ended April 30. This represented 68% year-over-year growth and 73% of total agreements.
As a result, C3.ai sales rose 25% year over year to $389.1 million in fiscal 2025. The company anticipates that its 2026 fiscal year will kick off with at least $100 million in Q1 sales, which would represent 15% year-over-year growth compared to the prior year's $87.2 million.
Like BigBear.ai, C3.ai is not profitable. It ended the 2025 fiscal year with a net loss of $288.7 million. However, its balance sheet was healthy. Fiscal Q4 assets totaled $1 billion, while total liabilities were $187.6 million.
Choosing between BigBear.ai and C3.ai
Although both companies saw sales growth to start the year, the rest of 2025 could be a different story. The U.S. government is cutting budgets.
The budget cuts could be damaging to BigBear.ai's business. The company stated: "The majority of our revenue is derived from federal government contracts."
The picture is different with C3.ai. Its federal government bookings represented 26% of the total for its 2025 fiscal year. Consequently, while budget cuts could hurt C3.ai, their effect on its business would be less than their effects on BigBear.ai.
C3.ai's diversified revenue is a plus over BigBear.ai, but in deciding which is the better investment, another factor to look at is share price valuation. This can be determined with a review of each company's price-to-sales (P/S) ratio, which measures how much investors are willing to pay for every dollar of revenue.
Data by YCharts.
As the chart shows, both businesses possess P/S multiples that are far more reasonable now compared to their peaks over the past year. For comparison, AI leader Nvidia's P/S ratio is 24 as of June 18, which indicates that BigBear.ai and C3.ai shares are attractively priced.
That said, BigBear.ai's P/S ratio remains higher than it was a year ago, while C3.ai is lower. This suggests that C3.ai stock is a good value, while its AI rival isn't the bargain it was in 2024.
When stacked against BigBear.ai, C3.ai's compelling valuation, superior sales growth, and strong balance sheet make it the better artificial intelligence investment for the long term.
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