This Artificial Intelligence (AI) Stock Is Up 36% in 2025. 1 Reason This Could Be Just the Beginning.
Key Points
BigBear.ai's stock has surged 35% year to date in 2025.
The acquisition of AskSage, a generative AI platform, will bring high-margin recurring revenue to BigBear.ai.
BigBear.ai is poised to benefit from increased government spending on AI and a shift toward recurring revenue streams.
Government agencies are increasingly turning to artificial intelligence (AI) solutions for data analysis, task automation, and faster decision-making. BigBear.ai (NYSE: BBAI) could be a significant beneficiary, and investors seem to agree as the stock has surged 36% year to date despite the lack of meaningful revenue growth.
One important reason to consider buying shares is that BigBear.ai just made a significant acquisition that could turbocharge its growth.
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Positioning for growth in government AI spending
While revenue fell 20% year over year in the third quarter, investors have shifted their focus entirely to the future. BigBear.ai announced an agreement to acquire AskSage, a fast-growing generative AI platform. This acquisition, along with similar deals that may follow, could serve as a key catalyst for growth.
AskSage not only brings a high-growth business to BigBear.ai, but will also strengthen the company's financials with high-margin recurring revenue. Management is currently choosing to invest heavily in expanding revenue through acquisitions. Higher revenue would make it easier to turn a profit, which would significantly boost the stock price in the long run.
BigBear.ai is poised to benefit from the anticipated rise in government spending on AI technology over the next few years. AskSage is currently used by over 16,000 government teams, as well as hundreds of commercial companies.
This is a volatile AI stock, but management's strategy to strategically acquire other AI businesses that provide recurring, high-margin revenue could be the single most significant catalyst that sends the stock higher in 2026 and beyond.
John Ballard has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.