Nations are dashing to embrace synthetic intelligence (AI), and for good motive. As Nvidia CEO Jensen Huang defined, “International locations all over the world are recognizing AI as important infrastructure — similar to electrical energy and the web.”
The Trump administration has signaled that the U.S. intends to guide the world in AI. Two companies serving to the federal government obtain this objective are BigBear.ai (BBAI 4.50%) and C3.ai (AI -0.80%).
Each corporations have delivered AI options to the likes of the U.S. Military and Division of Protection. However for those who had to decide on between the 2, which inventory is the higher AI funding for the lengthy haul? This is a have a look at every enterprise to reply that query.
Picture supply: Getty Pictures.
BigBear.ai’s professionals and cons
BigBear.ai delivers numerous AI options that concentrate on nationwide safety and infrastructure. For instance, it gives facial recognition software program to many airports to display passengers for safety dangers, and it is serving to the U.S. Navy assemble submarines with its AI-enhanced shipbuilding software program.
BigBear.ai’s enterprise delivered $34.8 million within the first quarter, a 5% year-over-year enhance. It additionally benefited from the train of 2024 warrants to the tune of $64.7 million in gross proceeds.
The corporate skilled management modifications this yr. Its CFO departed in June, and it gained a brand new CEO, Kevin McAleenan, in January. McAleenan served as Performing Secretary of the U.S. Division of Homeland Safety through the first Trump administration, so his expertise may show useful to BigBear.ai’s authorities enterprise.
That mentioned, the corporate faces some challenges. BigBear.ai will not be worthwhile. Its Q1 internet loss totaled $62 million, as a few of its working bills elevated yr over yr.
BigBear.ai additionally possesses substantial debt. Its Q1 complete liabilities of $198.5 million included long-term debt of $100.6 million, and that was after the quantity was diminished by $58 million by voluntary conversions of its 2029 convertible notes. Q1 belongings totaled $396.3 million.
Diving into C3.ai
C3.ai provides ready-made and customized AI options. Authorities prospects embrace the U.S. Air Drive, the Marine Corps, and the Nationwide Science Basis. It additionally boasts a large non-government enterprise with shoppers equivalent to ExxonMobil and Dow.
The corporate leverages partnerships to develop its gross sales attain. Companions closed 193 agreements in C3.ai’s 2025 fiscal yr, ended April 30. This represented 68% year-over-year progress and 73% of complete agreements.
Consequently, C3.ai gross sales rose 25% yr over yr to $389.1 million in fiscal 2025. The corporate anticipates that its 2026 fiscal yr will kick off with no less than $100 million in Q1 gross sales, which might signify 15% year-over-year progress in comparison with the prior yr’s $87.2 million.
Like BigBear.ai, C3.ai will not be worthwhile. It ended the 2025 fiscal yr with a internet lack of $288.7 million. Nevertheless, its steadiness sheet was wholesome. Fiscal This autumn belongings totaled $1 billion, whereas complete liabilities had been $187.6 million.
Selecting between BigBear.ai and C3.ai
Though each corporations noticed gross sales progress to begin the yr, the remainder of 2025 could possibly be a unique story. The U.S. authorities is slicing budgets.
The finances cuts could possibly be damaging to BigBear.ai’s enterprise. The corporate said: “Nearly all of our income is derived from federal authorities contracts.”
The image is completely different with C3.ai. Its federal authorities bookings represented 26% of the entire for its 2025 fiscal yr. Consequently, whereas finances cuts may damage C3.ai, their impact on its enterprise could be lower than their results on BigBear.ai.
C3.ai’s diversified income is a plus over BigBear.ai, however in deciding which is the higher funding, one other issue to take a look at is share value valuation. This may be decided with a evaluate of every firm’s price-to-sales (P/S) ratio, which measures how a lot buyers are keen to pay for each greenback of income.
Information by YCharts.
Because the chart exhibits, each companies possess P/S multiples which can be way more affordable now in comparison with their peaks over the previous yr. For comparability, AI chief Nvidia’s P/S ratio is 24 as of June 18, which signifies that BigBear.ai and C3.ai shares are attractively priced.
That mentioned, BigBear.ai’s P/S ratio stays greater than it was a yr in the past, whereas C3.ai is decrease. This means that C3.ai inventory is an effective worth, whereas its AI rival is not the discount it was in 2024.
When stacked in opposition to BigBear.ai, C3.ai’s compelling valuation, superior gross sales progress, and robust steadiness sheet make it the higher synthetic intelligence funding for the long run.
