BigBear.ai Stocks Fall 5% After Q2 Revenue Miss, Cuts Full-Year Outlook

BigBear.ai, a defense-focused AI company heavily reliant on U.S. government contracts, has faced significant financial challenges in 2025, including an 18.3% revenue decline and a sharp reduction in full-year revenue guidance from $160-$180 million to $125-$140 million. Despite President Trump promoting U.S. leadership in AI, federal spending cuts have impacted BigBear.ai's revenue, though new Department of Homeland Security funding and CEO Kevin McAleenan's DHS connections offer potential growth opportunities. The company reported a loss per share far exceeding expectations and continues to struggle with profitability, reflected in a negative return on equity and net margin. Investor confidence has waned amid disappointing earnings and lowered forecasts, with mixed analyst ratings ranging from buy to sell and a cautious consensus price target around $6. Institutional ownership remains modest, and trading has seen heightened volume amidst stock price declines. Overall, while the AI sector grows rapidly, BigBear.ai's challenges highlight the difficulty of balancing innovation with financial stability in a competitive and evolving market landscape.