BigBear.ai slides 29.4% as contract doubts, losses bite

BigBear.ai's 29.4% three-month decline comes as investors since early 2026 have been rotating out of technology bets and questioning whether relatively smaller AI companies can keep pace with better-capitalized competitors. The company found itself in that crossfire despite reporting revenue and bottom-line growth in the first half of 2026.

The pressures are compounding. Revenue growth of 13% year over year to $36.7 million in the second quarter of 2026 remains modest against the strong demand narrative around AI and defense technology. The company's backlog rose 9% from year-end 2025 to $269.6 million as of June 30, 2026, but that backlog remains exposed to government funding, contract timing, option periods and potential cancellations. Meanwhile, the second-quarter 2026 net loss was $25.7 million and adjusted EBITDA deteriorated to a loss of $11.6 million from a loss of $8.5 million a year earlier, driven by a $10.4 million year-over-year rise in SG&A expenses to $31.8 million and higher research and development costs. Gross margin expanded to 32.8%, but that improvement has not yet translated into operating profitability.

The company is pursuing acquisitions and integrating businesses such as Ask Sage and CargoSeer, with management planning to accelerate M&A. Whether BigBear.ai can turn its backlog into revenue and move toward sustainable profitability appears to hinge on government appropriations and contract execution, leaving execution and integration as the key tests for investors in smaller AI names.