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Yahoo
29-07-2025
- Business
- Yahoo
The Under-the-Radar AI Stock That Beat Big Tech in 2025
While the market has focused on the AI-driven rally in Big Tech companies such as Nvidia (NVDA), Microsoft (MSFT), and Alphabet (GOOGL), one hidden gem has quietly outperformed them all. (BBAI), a mid-cap artificial intelligence (AI) firm, has emerged as a stealth growth story, outperforming expectations and showing real traction in mission-critical government work, industrial innovation, and defense applications. More News from Barchart Tesla Just Signed a Chip Supply Deal with Samsung. What Does That Mean for TSLA Stock? Dear Microsoft Stock Fans, Mark Your Calendars for Aug. 1 Is Lucid Motors Stock a Buy, Sell, or Hold for July 2025? Stop Missing Market Moves: Get the FREE Barchart Brief – your midday dose of stock movers, trending sectors, and actionable trade ideas, delivered right to your inbox. Sign Up Now! So far in 2025, BigBear stock has outperformed major AI benchmarks and large-cap tech names, which is unusual for a mid-cap defense-tech player. The stock has risen 59% year to date, outperforming Nvidia (up 30.6%), Microsoft (up 21%), and Google (up 1.4%). Let's find out if it is the right time to grab this hidden gem now. A New Chapter for led by newly appointed CEO Kevin McAleenan, is positioning itself in the rapidly evolving AI economy. reported $34.8 million in first-quarter revenue, up 5% year over year despite a challenging and often unpredictable government contracting landscape. More impressive is the company's 30% increase in backlog, which now totals $385 million. This expanding order book reflects growing trust in AI-powered solutions for security, logistics, and critical infrastructure. While analysts focus on headline-making AI chipmakers, is building a growth story around sticky, long-cycle contracts and mission dependency. During the Q1 earnings call, management stated that is continuing to push several of its research projects into general availability, including real-world AI solutions such as veriScan, Trueface, Pangiam Threat Detection, and ConductorOS. These products are at the intersection of AI and national security, allowing to meet the growing demand for automated threat detection, secure identity verification, and intelligent decision-making platforms. This resulted in an increase in R&D spending of $4.2 million in Q1, up from $1.1 million in the year-ago period. While the company is still unprofitable, its net loss narrowed to $62 million, compared to $127.8 million in the year-ago quarter. is also working to strengthen its balance sheet, ending the quarter with $107.6 million in cash and equivalents. Furthermore, the company reduced its convertible note debt by $58 million, bringing the remaining principal to $142 million. recent contract wins have piqued investor interest, resulting in a surge in its stock performance. In Q1, the company won a critical contract for the Department of Defense Joint Staff J35's Orion Decision Support Platform. The company is also working to strengthen its partnerships with key industry players such as Austal USA in shipbuilding and Smith Detection for global threat detection deployments. McAleenan boasted that the company's success stems from combining cutting-edge AI with a thorough understanding of government and infrastructure systems. This has helped the company win in areas where many larger companies struggle. reaffirmed its revenue guidance for 2025, forecasting $160 million to $180 million, up from $158.2 million in 2024. Adjusted EBITDA could be in the negative single-digit millions. Analysts covering the stock expect revenue growth of 6.1% in 2025, followed by another 12% in 2026. Looking ahead, management targets three key areas: a strong balance sheet, a healthy and expanding backlog of government and commercial contracts, and relentless innovation. expansion into government, commercial, domestic, and international markets will enable it to generate a diverse revenue stream with recurring, long-term potential. Is BBAI Stock a Buy, Hold, or Sell on Wall Street? On Wall Street, overall, BBAI stock is a 'Moderate Buy.' Out of the four analysts that cover the stock, two rate it a 'Strong Buy,' and two rate it a 'Hold.' With the dramatic surge this year, the stock is trading way over its average target price of $5.83. The high price estimate of $9 implies 26% upside from current levels. The Overlooked Winner in 2025 may not be a profitable name yet. However, its stock has outperformed many of the well-known Big Tech names in 2025. with its strengthened balance sheet, accelerating contract momentum, and leadership laser-focused on profitable execution, could be one of the most compelling under-the-radar AI plays of the decade for investors with a high risk tolerance and long investment horizon. However, the company is not yet profitable. It would be wise to keep watch to see if can continue to convert its backlog into profitable growth quickly enough to survive in this highly competitive space. On the date of publication, Sushree Mohanty did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
23-06-2025
- Business
- Yahoo
BigBear.ai vs. Five9: Which AI-Driven Software Stock Is the Better Buy Now?
Artificial intelligence is transforming the software landscape, and two companies at the forefront — BBAI and Five9 FIVN — are drawing investor attention. specializes in AI-powered decision intelligence and predictive analytics primarily for government and defense applications. Meanwhile, Five9 operates in the cloud contact center software space, integrating generative AI into customer experience (CX) platforms for commercial companies are leveraging AI to solve complex problems across industries. Their innovations span from defense-grade analytics to enterprise-grade AI agents. With distinct end-markets and operating models, comparing and Five9 offers investors a timely look at two vastly different ways AI is being commercialized. One stock is striving for profitability and execution stability, while the other is already delivering margin expansion and growth dive deep and closely compare the fundamentals of the two stocks to determine which one is a better investment now. is attempting a strategic pivot toward sustainable growth under a new CEO, Kevin McAleenan. With deep roots in national security and border management, the company's core strength lies in deploying AI for critical infrastructure, defense, and homeland security applications. Its platforms like Orion, ConductorOS, and are tailored to address complex challenges in mission-critical settings, giving a defensible growth of 30% year over year to $385 million signals longer-term customer confidence, particularly with new contract wins like the Department of Defense's Orion platform and partnerships with Austal USA. Still, the near-term financial picture is troubled. While is innovating aggressively—especially through international expansion and commercial crossovers from its Pangiam security technology—the company's lumpy revenue model, non-GAAP losses, and limited commercial diversification expose investors to significant first-quarter 2025, reported revenue of $34.8 million, missing estimates and showing only 5% year-over-year growth. Its adjusted EBITDA came in at a loss of $7 million, reflecting growing R&D spend and delayed federal funding cycles. While the company ended the quarter with a much-improved $108 million in cash, up significantly from the prior quarter and the prior-year quarter, this buffer is necessary given ongoing losses and volatility in government procurement. Five9 presents a mature, scalable enterprise SaaS company capitalizing on the generative AI boom in customer experience. Its AI-powered 'Genius' platform integrates seamlessly with enterprise systems like Salesforce and ServiceNow, and provides self-service AI agents, transcription, agent assist, and intelligent routing capabilities. These solutions are increasingly mission-critical for large brands optimizing customer service with first-quarter 2025, Five9 reported revenues of $279.7 million, up 13.2% year over year and ahead of guidance. Subscription revenue, which is 80% of total revenue, rose 14% year over year, while enterprise AI revenue surged 32% year over year and now comprises 9% of enterprise subscription revenue. The company delivered record free cash flow of $34.9 million, adjusted EBITDA margin of 18.8% (up 360 basis points year over year), and EPS of 62 cents (up 29% from a year ago)—all pointing to disciplined momentum is also reflected in rising demand among Fortune 500 clients, with major wins across healthcare, financial services, and mobility. It is deepening AI adoption in its install base via its AI Blueprint program, which boasts a 50% conversion rate. Moreover, strategic partnerships with Salesforce CRM, Google Cloud, IBM watsonx and ServiceNow NOW enhance Five9's platform reach and monetization potential. The recent launch of Five9 Fusion provides native AI-powered customer experience enhancements inside Salesforce, improving sales adoption. Additionally, the ServiceNow integration enables AI-powered real-time transcription and workflow routing, while the IBM watsonx collaboration offers clients optionality in large language model selection. Despite macroeconomic headwinds and some sales cycle elongation, particularly in international markets, Five9 reaffirmed its $1.14 billion full-year revenue guidance and raised EPS guidance. Its operating leverage, robust AI-led growth engine, and expanding free cash flow place it on track to exceed the Rule of 40 metrics by 2027. stock is up 13% over the past three months, outperforming the Zacks Computer and Technology sector. However, BBAI stock is down 10.1% year to the past three months, Five9 shares are down about 13% and down 34% year to date. This slump came as investors worried about tech stocks and Five9's slowing growth rates, but the recent first-quarter beat has sparked a partial at current levels, the stock remains well below its 52-week high of $49.90. Wall Street analysts see considerable upside from here – the average price target for Five9 is about 37.6% higher than the most recent current price. Share Price Performance Image Source: Zacks Investment Research At around $4.00 per share (as of Friday), valuation isn't cheap. The company trades at about 6.59× forward 12-month trailing sales, much higher than FIVN's 1.71 ratio. At $26.85 per share, FIVN trades at roughly 1.71× trailing 12-month sales – a price-to-sales ratio that is quite low for a software company with double-digit growth. Image Source: Zacks Investment Research Earnings estimate trend for FIVN has been trending upward, whereas the market remains skeptical about BigBear's ability to translate its contract pipeline into sustained profitability. The loss estimate has widened over the past 60 days for BBAI stock. The estimated figure for FIVN's 2025 EPS reflects 11.7% growth from 2024. While BBAI is expected to report a loss of 41 cents per share, narrower than the year-ago loss of $1.10 per share. For BBAI Image Source: Zacks Investment Research For FIVN Image Source: Zacks Investment Research Both and Five9 are leveraging AI to fuel their businesses, but they occupy different ends of the risk spectrum. offers exposure to a cutting-edge, government-focused AI niche and has the potential for explosive gains if it can convert its hefty backlog into profitable growth. However, with its small size, ongoing losses, and dependence on government contract timing, stock is highly speculative and prone to big swings. The current Zacks Rank #4 (Sell) on BBAI reflects these near-term on the other hand, presents a more established growth story in the AI software space. It is already generating over a billion dollars in revenues with improving margins, and its contact-center AI solutions address a massive market. The stock's sharp decline earlier this year has left it trading at a reasonable valuation, and analysts see a meaningful upside if performance continues on its current track. Five9 carries a Zacks Rank #2 (Buy) presently, signaling upward earnings estimate revisions and a favorable outlook. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Salesforce Inc. (CRM) : Free Stock Analysis Report ServiceNow, Inc. (NOW) : Free Stock Analysis Report Five9, Inc. (FIVN) : Free Stock Analysis Report Holdings, Inc. (BBAI) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research
