Why BigBear.ai Stock Is Losing Ground in the AI Boom

When the entire artificial intelligence sector is experiencing explosive growth, you’d expect companies riding this wave to flourish. Yet BigBear.ai presents a puzzling contradiction: while industry spending on AI continues to accelerate, this security-focused technology stock has moved in the opposite direction. The disconnect between market tailwinds and this company’s actual performance raises fundamental questions about its competitive position and long-term viability.

A Paradox: AI Spending Soars While BigBear’s Revenue Sinks

The numbers tell a stark story. Over the past three years, AI spending by major technology companies has skyrocketed. In 2024, hyperscalers invested approximately $197 billion in AI capital expenditures. This figure jumped dramatically to around $405 billion in 2025, and Wall Street projects it could reach $527 billion in 2026, with some analysts suggesting it might even climb toward $700 billion.

Against this backdrop of surging industry investment, BigBear.ai’s trajectory looks increasingly troubled. Rather than capturing a share of this booming market, the company’s revenue has actually declined by 10.3% over the same three-year period. This isn’t a temporary stumble—it reflects a fundamental inability to capitalize on unprecedented demand for AI solutions.

The contrast becomes even more glaring when compared to competitors. Palantir Technologies, another security-oriented AI company operating in similar markets, has grown its revenue by 96.3% during the identical timeframe. When a peer company is thriving while your company stagnates, it signals deeper problems with competitive positioning, product-market fit, or execution capabilities.

Share Dilution: The Hidden Tax on Early Investors

Beyond revenue concerns, BigBear.ai investors face a structural problem that compounds over time: aggressive share dilution. Since 2024, the company’s outstanding share count has nearly tripled, expanding from 156.8 million shares to 436.6 million shares. This dramatic increase has effectively reduced the value of existing shares—investors who owned stock before 2024 have already experienced approximately 64% destruction in their share value from dilution alone.

The mathematics of share dilution work like this: imagine a company’s future profits as a fixed pie. When management issues significantly more shares, each existing share represents a smaller slice of that same pie. Your ownership stake doesn’t change numerically, but its economic value deteriorates.

The concerning part is that this may only be the beginning. The 436.6 million shares currently outstanding are approaching the company’s authorized limit of 500 million shares. Management recently held a proxy vote to increase the authorization ceiling from 500 million to 1 billion shares—essentially preparing to double the potential share count. Major proxy advisory firms ISS and Glass Lewis both recommended shareholders approve this measure, suggesting the vote likely passed. If fully realized, this authorization could result in existing shareholders’ stake values being cut in half or more.

When Growth Capital Comes at an Extreme Cost

Management justifies the need for additional share authorization, arguing that the ability to issue new shares is essential for acquisitions, product development, and balance sheet strength. This reasoning might hold weight if the company were using that capital to drive exceptional growth. But when revenue is declining while competitors are flourishing, this argument rings hollow.

Shareholders face an uncomfortable dilemma: either accept massive dilution that could halve their ownership value, or watch the company remain capital-constrained and unable to compete effectively. In the context of a company already losing ground to competitors, neither path appears attractive.

The Takeaway for Stock Investors

BigBear.ai Stock presents a case study in why financial markets sometimes reward narrative over substance. The company possesses an attractive AI-focused narrative, yet its financial fundamentals tell a concerning story. Declining revenue despite sector tailwinds, aggressive share dilution, and a competitive position that’s deteriorating relative to peers create multiple headwinds that offset any appeal from the AI industry’s growth trajectory.

For investors evaluating technology stocks in this space, this case underscores the importance of looking beyond catchy story lines and examining actual execution, unit economics, and whether management’s actions create or destroy shareholder value. In BigBear’s case, the evidence points toward value destruction and a company falling further behind in an industry it should be thriving within.