A small deep-value investor with a background in aeronautical engineering has increased his allocation in BigBear.ai Holdings, Inc. to 5% of his portfolio, citing two catalysts since his last coverage. First, BBAI’s insider buying following a recent sell-off signaled management’s confidence in the company’s valuation. Second, the investor anticipates that a proposed 50% increase in the U.S. defense budget—from $1 trillion to $1.5 trillion in 2027—will drive demand for both defense contracts and BBAI’s advanced AI analytics solutions. He believes BBAI is well positioned to benefit from a defense spending surge as agencies seek predictive modeling, real-time insights and edge orchestration platforms in contested environments.

BigBear.ai’s trailing-12-month revenue has declined by 10.3% over the past three years, while net losses have ballooned from $69 million at the start of 2024 to $396.1 million today. To counteract these trends, BBAI completed two acquisitions—AI vision specialist Pangiam in 2024 and secure-environment generative AI provider Ask Sage in 2025—but faces integration risks and fierce competition for future targets. Meanwhile, management has nearly tripled the share count from 156.8 million shares at the beginning of 2024 to 436.6 million today, and is seeking shareholder approval to authorize up to 1 billion shares. This potential dilution raises concerns among investors regarding future equity value and reinforces the need for a clear path to profitability before allocating additional capital.