As artificial intelligence (AI) continues to reshape the technology landscape, several tech stocks have experienced significant gains in 2025. Among these, Palantir Technologies Inc. (PLTR) and BigBear.ai Holdings, Inc. (BBAI) stand out, with respective stock increases of 156.7% and 35.5%. Both companies focus on defense applications, but they differ in scale and market positioning, making them noteworthy options for investors as the year progresses.
Palantir, a more established player in the AI-driven defense and enterprise software space, has evolved beyond its traditional reliance on government contracts. The company’s flagship product, the Artificial Intelligence Platform (AIP), has gained traction among U.S. commercial clients as well as in government sectors. For the third quarter, Palantir reported revenues of $1.18 billion, marking a 63% increase year-over-year and an 18% rise quarter-over-quarter. This growth was driven by a substantial surge in revenues from U.S. commercial clients, which reached $397 million, representing a 121% increase year-over-year and a 29% sequential rise. Meanwhile, government contracts brought in $486 million, up 52% from the previous year and 14% quarter-over-quarter.
The uptick in demand for AIP prompted Palantir to revise its fourth-quarter sales guidance, projecting revenues between $1.327 billion and $1.331 billion, and a full-year revenue forecast of $4.396 billion to $4.400 billion. The company is optimistic about its profitability, predicting positive GAAP operating income and net income in each quarter this year. With an expanding U.S. commercial client base and increasing government contracts, Palantir anticipates an earnings growth rate of 42.5% for the upcoming year, solidifying its position as a strong contender in the AI market.
In contrast, BigBear.ai has faced a more volatile path this year. The initial optimism stemming from the Trump administration’s focus on advancing technology led to a rise in BigBear.ai’s stock. However, the subsequent federal spending cuts have put pressure on the company, resulting in a 20% year-over-year revenue decline to $33.1 million in the third quarter, following an 18% decline in the second quarter. Despite these challenges, BigBear.ai’s leadership remains positive following its acquisition of Ask Sage for $250 million, a move that CEO Kevin McAleenan believes will enhance the company’s offerings. “By integrating Ask Sage with BigBear.ai, we are creating what the market has been asking for: a secure, integrated AI platform that connects software, data, and mission services in one place,” he stated.
Ask Sage is recognized as a rapidly growing generative AI platform aimed at defense and national security applications. With early adoption from agencies like the U.S. Space Force and the Defense Health Agency, the platform is expected to bolster BigBear.ai’s market position. The company has raised its full-year sales outlook to between $125 million and $140 million, signaling optimism for revenue recovery. Additionally, BigBear.ai holds a robust cash position of $456.6 million as of September 30, 2025, providing ample liquidity to fund its growth initiatives. Analysts project an impressive earnings growth rate of 73.1% for the coming year.
Both Palantir and BigBear.ai currently hold a Zacks Rank #2 (Buy), indicating a favorable outlook among analysts. As the AI market continues to expand and evolve, these companies are positioned to capitalize on the increasing demand for advanced technology solutions in defense and beyond. With their unique strengths and growth trajectories, Palantir and BigBear.ai are poised to be key players in the ongoing AI revolution, appealing to investors looking for robust opportunities in this burgeoning sector.
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