It might not occur to you how deeply artificial intelligence (AI) has seeped into our daily routines – from voice commands on smartphones, customized shopping suggestions online or when watching videos, targeted ads, automatic labeling of photos, intelligent home appliances, and AI-driven customer service chatbots – this is merely a small glimpse. AI is currently omnipresent in our lives and its presence will only grow more prevalent in the future.
It might surprise you to know that AI is extensively integrated within the U.S. government. Moreover, collaborations are ongoing between the administration and various companies for strategic initiatives aimed at enhancing AI usage across federal workplaces.
Specifically, let’s focus on Palantir Technologies (PLTR, up by 1.84%) and BigBear.ai (BBAI, with a gain of 15.17%) as potential investment options for those interested in the expanding role of artificial intelligence within the federal administration.
Palantir Technologies
When considering AI and its relationship with the federal government, it’s hard to overlook Palantir, given its significant stock growth over recent quarters. In fact, within the past 12 months, Palantir’s stock has skyrocketed by an impressive 414%, and just last year, you could purchase a share for less than $22. As of 2025, the stock had risen nearly 90%.
The expansion of Palantir is connected to the unveiling of its Artificial Intelligence Platform (AIP), a system that integrates advanced language models into both its Gotham and Foundry platforms, specifically designed for governmental and commercial clients respectively. By leveraging generative AI within these robust systems, users can construct intricate commands for Palantir to extract insights from vast data sets, enabling them to make immediate decisions more effectively. This capability is particularly significant in combat scenarios, as Palantir can gather information from numerous satellites and deliver critical intelligence to commanders, allowing them to achieve objectives while minimizing risk to their troops.
Palantir is said to be broadening its governmental involvement beyond military operations. It’s collaborating with various departments like the Department of Homeland Security, the Department of Health and Human Services, and potentially the Social Security Administration and the Internal Revenue Service. Their aim is to establish a single, integrated government database. This objective, in itself, has raised eyebrows. Interestingly, Elon Musk had envisioned something similar when he led the Department of Government Efficiency (DOGE). Despite him leaving the administration, this project continues forward.
Without a doubt, Palantir holds a staggeringly high valuation, boasting a price-to-earnings ratio of 617 and a forward P/E of 250. This figure alone might deter many investors. However, I firmly believe that Palantir represents a groundbreaking investment opportunity with a promising future, making it a compelling choice for me.
BigBear.ai
BigBear.ai is involved with the Pentagon and intelligence agencies, though not to the same degree as Palantir. However, it’s a company worth keeping an eye on. With continued and expanding government contracts, there’s significant potential for growth in this stock.
The contract, valued at $13.2 million, was granted in March to BigBear.ai for the modernization and upkeep of the Orion Decision Support Platform. This platform, used by the Joint Chiefs of Staff’s office, offers analytical and automated force management tools to the Department of Defense.
The business was awarded a $165 million deal towards the end of last year for updating U.S. Army systems using advanced, data-centric force management platforms.
In the first quarter of 2025, those deals are substantial for a company that earned just $34.8 million in sales. Despite a modest 5% increase in revenue compared to the previous year, this firm now boasts a contract backlog amounting to an impressive $385 million.
It appears that BigBear.ai is making good progress towards achieving profitability. The company’s first-quarter loss this year was significantly reduced from the $127.8 million loss it had in the same quarter last year, reporting a loss of only $62 million. Furthermore, the company anticipates revenue for the full year to be between $160 million and $180 million, as compared to its full-year revenue of $158.2 million in 2024.
If you’re searching for a company that might be the next Palantir, BigBear.ai could potentially fit the bill. At this stage, it doesn’t have an earnings-to-price ratio (P/E), but its sales-to-price ratio is approximately 10 – making it more attractive compared to Palantir’s sales-to-price ratio of 113.5.
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2025-07-17 19:26