BigBear.ai stock has surged 430% in the past year, but sales growth remains slow. Revenue increased by only 5% to $35 million in Q1 2025, primarily from government contracts. BigBear.ai needs to expand into the commercial market to accelerate growth like its peer Palantir Technologies, which saw a 39% revenue increase year over year.

Investors have been bullish on BigBear.ai due to AI deployment in national security, digital identification, and supply chain management. However, the company’s heavy reliance on government contracts hinders explosive growth. To sustain momentum, BigBear.ai must diversify into commercial markets, as Palantir did, achieving 39% revenue growth in Q1 2025 from commercial clients.

BigBear.ai’s revenue backlog increased by 30% to $385 million in Q1 2025, but only $20 million was funded. Most of the backlog is unexercised options, meaning revenue growth may suffer if customers don’t utilize their contracts fully. The stock’s high valuation of 12x sales raises concerns about sustainability and potential future declines.

Read more at Yahoo Finance: Where Will BigBear.ai Stock Be in 1 Year?