Why Keeping Your Distance From BigBear.ai Stock Makes Financial Sense

When a company’s ticker symbol sounds like a farewell, it might be worth heeding that subtle message. BigBear.ai (NYSE: BBAI), a security-focused artificial intelligence company, presents a compelling case for why investors should maintain a considerable pole of distance between themselves and this much-hyped stock. The warning signs are clear, and they’re backed by hard numbers that tell a troubling story.

The AI Investment Boom Hasn’t Reached BigBear.ai

The artificial intelligence sector is experiencing unprecedented capital inflows. Major hyperscalers deployed an estimated $197 billion in AI capital expenditures during 2024. That figure nearly doubled to approximately $405 billion in 2025, with Wall Street projections suggesting $527 billion or higher for 2026. This explosive growth in AI infrastructure spending reflects the technology sector’s commitment to artificial intelligence development.

Yet BigBear.ai’s financial performance moves in the opposite direction. Over the past three years, the company’s revenue has actually declined by 10.3%—a striking contradiction to the booming AI investment climate. Meanwhile, peer company Palantir Technologies, another security-focused AI firm, has grown its revenue by 96.3% over the same period. This divergence raises fundamental questions about BigBear.ai’s competitive positioning and market relevance.

The Shareholder Dilution Problem: A Slice Gets Thinner

Understanding share dilution is straightforward: imagine your stock ownership as a slice of pizza. When a company issues additional shares, it cuts that pizza into more pieces, making each slice progressively thinner and less valuable. This is precisely what has happened to BigBear.ai shareholders.

Since 2024, the company’s share count has surged from 156.8 million shares to 436.6 million shares—nearly tripling in just two years. Shareholders who purchased stock before 2024 have already experienced approximately 64% depreciation in their holdings due to this dilution alone.

The situation threatens to deteriorate further. With the current share count approaching the company’s 500 million share ceiling, management recently submitted a proxy proposal to increase the authorized share limit from 500 million to 1 billion shares. Both major proxy advisory firms—ISS and Glass Lewis—recommended supporting the expansion. If approved, shareholders could witness their ownership stakes halved once again as the company exercises this expanded authority.

Management’s Rationale Versus Shareholder Reality

CEO Kevin McAleenan has framed additional share issuance capability as essential for making acquisitions, funding product development, and strengthening the balance sheet. From management’s perspective, the expanded capacity provides strategic flexibility. However, from a current shareholder’s viewpoint, this flexibility comes at their direct expense through wealth erosion via dilution.

Investors face an unappealing choice: either accept significant share dilution if the proposal passes, or witness the company’s constrained ability to execute its growth strategy if it fails. Neither scenario presents an attractive risk-reward profile for equity holders.

The Investment Verdict

The combination of declining revenue amid sector-wide AI spending acceleration, alongside aggressive shareholder dilution already experienced and potentially looming, creates a challenging investment thesis. For those seeking exposure to security-focused artificial intelligence companies, superior alternatives demonstrating revenue growth alongside more disciplined capital allocation strategies merit serious consideration. BigBear.ai’s fundamentals suggest that maintaining considerable distance from this stock remains the prudent course.