Artificial Intelligence Stocks: Comparison between BigBear.ai and C3.ai for Superior Performance
In the rapidly evolving world of artificial intelligence (AI), two companies, BigBear.ai and C3.ai, have caught the attention of investors for their significant contributions to the U.S. government.
Financially, both companies have shown promising growth, but a closer look reveals distinct differences. BigBear.ai, for instance, has reported a modest 5% year-over-year revenue growth in Q1 2025, reaching $34.8 million. However, it faces ongoing profitability challenges, with an adjusted EBITDA loss widening and SG&A expenses surging, signalling less efficient cost management.
On the other hand, C3.ai has demonstrated stronger financial performance, reporting a significant 25.6% year-over-year revenue growth, narrowing the gap with faster-growing AI peers. This strong top-line growth suggests better momentum and scalable business operations than BigBear.ai.
In terms of government contracts, BigBear.ai focuses on national security AI and operational integration, securing key deals with the Department of Homeland Security and the Department of Defense's Joint Staff J35 Orion AI platform. This niche market, coupled with a $385 million contract backlog and $108 million liquidity, provides some runway despite near-term difficulties.
C3.ai, however, offers a more diversified approach, serving enterprise customers beyond just government contracts, which may provide more stable revenue streams.
When it comes to valuation, BigBear.ai's growth rate remains slow relative to peers and it has a relatively small revenue base. Its gross margins are also comparatively poor, indicating potential operational inefficiencies. In contrast, C3.ai is positioned as a beaten-down stock with growth potential, making it a more attractive investment option.
In the long run, C3.ai's compelling valuation, superior sales growth, and strong balance sheet make it the better artificial intelligence investment. The Trump administration's signal that the U.S. intends to lead the world in AI further underscores the potential for growth in this sector.
While BigBear.ai's government contract niche is attractive, its slower growth and ongoing profitability challenges weigh on its investment potential in the near term. It's important to note that BigBear.ai has substantial debt and a higher P/S ratio compared to C3.ai, which may not make it as attractively priced.
In conclusion, given the stronger revenue growth, broader market exposure, and better growth prospects, C3.ai is likely the better long-term investment for 2025. Investors seeking growth opportunities in the AI sector should consider C3.ai as a strong contender.
Investors may find C3.ai more appealing due to its higher revenue growth rate and potential for future growth, as opposed to BigBear.ai which has reported slower growth and ongoing profitability challenges. Additionally, C3.ai's diverse customer base, including enterprise customers and the U.S. government, grants it possible stability in revenue streams that BigBear.ai does not yet display.
