BigBear.ai (NYSE: BBAI) has had a tumultuous 2025, with a 70% increase in stock value year to date, but also a 46% decline. The company, focused on AI, serves U.S. government clients and has won key contracts with the UAE, but relies heavily on a few clients for revenue, posing risks.

Despite a 5% revenue increase in Q1 2025, BigBear.ai’s concentration of clients and service-oriented model lead to lower gross margins compared to software companies. This limits potential profitability, making the stock currently expensive. Investors speculate on potential contract wins to drive growth and valuation.

BigBear.ai’s volatile stock performance in 2025 raises questions about its future trajectory. With limited revenue and reliance on a few clients, the company’s profitability and growth potential are under scrutiny. Investors weigh the risks of investing in a company with lower gross margins and uncertain future contract wins.

Read more at Yahoo Finance: Will BigBear.ai Soar in the Second Half of 2025?