Can BigBear.ai Stock Double Again?

BigBear.ai (NYSE: BBAI), an AI solutions provider specializing in national security, has delivered exceptional returns, surging over 70% in a month to breach $9 per share, with a 22% single-day gain following its latest strategic announcement. Last month, we talked about the upside potential for BBAI stock from levels of $5 to $10. Now that the stock is already closer to those levels, the focus shifts to whether the stock can double again to levels above $20.

We will delve into these factors in the sections below. That being said, if you seek an upside with less volatility than holding an individual stock, consider the High Quality Portfolio. It has comfortably outperformed its benchmark—a combination of the S&P 500, Russell, and S&P MidCap indexes—and has achieved returns exceeding 105% since its inception. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.

Image by Palle from Pixabay

The recent rally was triggered by BigBear.ai’s strategic partnership with Tsecond, Inc., announced on October 13, 2025, to deliver AI-enabled edge infrastructure for mission-critical operations. This partnership will enable U.S. national security organizations to deploy AI more rapidly and reliably at the tactical edge by simplifying the deployment and management of AI. The deal represents a significant validation of BigBear.ai’s technology in the increasingly critical domain of battlefield AI deployment, where speed and reliability are paramount. Edge computing capabilities for defense applications are becoming essential as military operations require real-time AI decision-making in contested environments with limited connectivity.

Key Drivers for 2x Upside to $20+

1. Tsecond Strategic Partnership: The newly announced collaboration opens a substantial addressable market in edge AI for defense applications. The partnership positions BigBear.ai to capture growing demand for decentralized AI infrastructure capable of operating in austere environments, a capability increasingly prioritized by DoD modernization initiatives.
2. Expanding Defense Contract Pipeline: BigBear.ai secured a 3.5-year, $13.2 million sole-source DoD contract in March 2025 to modernize a critical force management platform. The company’s backlog ballooned to $380 million, providing substantial revenue visibility. Additional contracts across geopolitical risk analysis, fleet management systems, and homeland security initiatives demonstrate broadening agency adoption.
3. Defense AI Spending Momentum: The broader defense AI market is experiencing accelerated investment as the Pentagon prioritizes artificial intelligence across all operational domains. BigBear.ai is well-positioned as a pure-play defense AI company with established credentials and security clearances, enabling it to capture disproportionate share of this expanding budget allocation.
4. Commercial and International Expansion: While defense remains the core focus, BigBear.ai has opportunities to leverage its AI capabilities into adjacent markets including critical infrastructure, airport security, and international defense partners. These expansion vectors could materially diversify revenue streams and reduce customer concentration risk.
5. Operational Leverage Potential: As the company scales revenue from its growing backlog, operating margins should expand significantly. The high-margin nature of software and AI services, combined with reusable platforms across multiple contracts, suggests substantial earnings leverage as revenue grows.

Risk Factors That Could Hamper The Growth

Several risks could impede BigBear.ai’s path to $20. Recent financial results showed second quarter 2025 revenue of $32.5 million, down $7.3 million year-over-year, primarily due to disruptions in Army programs, highlighting vulnerability to program delays or cancellations. Revenue lumpiness remains a concern given the project-based nature of government contracts and unpredictable procurement timelines. The company faces intense competition from larger defense contractors and well-funded AI companies entering the defense space. The stock’s recent parabolic move also creates technical risk of consolidation or profit-taking before establishing a new base for further gains. Also, look at our take on downside risk for BBAI stock.

See, investing in a single stock without comprehensive analysis can be risky. Consider the Trefis Reinforced Value (RV) Portfolio, which has outperformed its all-cap stocks benchmark (combination of the S&P 500, S&P mid-cap, and Russell 2000 benchmark indices) to produce strong returns for investors. Why is that? The quarterly rebalanced mix of large-, mid-, and small-cap RV Portfolio stocks provided a responsive way to make the most of upbeat market conditions while limiting losses when markets head south, as detailed in RV Portfolio performance metrics.

The Bottom Line

BigBear.ai’s path to $20+ hinges on successful execution across multiple fronts. The Tsecond partnership validates the company’s technology at a critical inflection point for defense AI adoption, while the $385 million backlog provides a foundation for sustained revenue growth. The combination of expanding DoD AI budgets, strategic partnerships, and operational leverage potential creates a compelling setup for another doubling from current levels. However, investors must weigh this upside against meaningful execution risks and revenue volatility inherent in government contracting. The recent 73% surge has already priced in significant optimism—further gains will require the company to convert its backlog efficiently and demonstrate improving profitability as it scales.

Invest with Trefis Market-Beating Portfolios

See all Trefis Price Estimates