BigBear.ai (BBAI 0.41%) stock is seeing big gains in this week’s trading. The artificial intelligence (AI) software company’s share price was up 13.9% from last week’s market close heading into the opening of Friday’s daily session, according to data from S&P Global Market Intelligence.
BigBear.ai saw valuation gains this week in conjunction with an AI summit that was held in Paris this week and attended by political leaders and tech executives. The company’s share price is now up 443% over the last year.
BigBear.ai stock rises as AI takes the world stage
BigBear.ai’s valuation saw multiple gains this week in conjunction with the multiday Paris AI summit. The stock kicked off the week with moderate gains on Monday thanks to European leaders indicating that they would be taking a more hands-off approach to AI regulation in hopes of furthering innovation. While BigBear.ai is mostly concentrated on the U.S. market, the shift in regulatory outlook helped power valuation gains for the broader AI space.
The following day, Vice President JD Vance gave a closing speech at the event and indicated that the Trump administration would provide strong support for the U.S. artificial intelligence industry. Vance said in his speech, “The Trump administration will ensure that the most powerful AI systems are built in the U.S., with American design and manufactured chips.” While there wasn’t any business-specific news powering BigBear.ai’s gains this week, political dynamics appear to be moving in favorable directions for the company.
What’s next for BigBear.ai?
BigBear.ai stock has been on red-hot run lately. The company’s share price is up 228% over the last month alone, with gains being driven by current CEO Kevin McAleenan replacing former CEO Mandy Long and contract wins with the U.S. military. Following the stock’s incredible run, the software specialist now has a market capitalization of roughly $2.4 billion and trades at approximately 12.6 times this year’s expected sales.
While new contract wins and excitement surrounding artificial intelligence could continue to push the company’s valuation higher, shares look risky on the heels of recent gains. With the third-quarter results it published in November, the company announced that revenue had increased 22.1% to reach $41.5 million — an encouraging growth rate. On the other hand, the business posted a gross margin of just 25.9% in the period, which is strikingly low for a company in its industry. The company will likely be publishing its Q4 results in March, and the report could result in big moves for the stock.
Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
