Synthetic intelligence continues to reshape the protection panorama, and each rising innovators and established integrators are competing aggressively for relevance throughout federal companies. BigBear.ai Holdings, Inc. BBAI and Leidos Holdings, Inc. LDOS sit at two totally different ends of this spectrum. BigBear.ai is a centered, AI-native firm present process a strategic evolution, whereas Leidos is a multibillion-dollar protection and authorities providers powerhouse embedding AI throughout its huge portfolio. Their missions overlap in nationwide safety, analytics, and digital modernization, and each profit from long-term federal expertise funding developments. This makes the pair significantly compelling to match now, particularly as every firm just lately launched earnings updates and as companies speed up AI adoption throughout essential domains.
Though every firm is uncovered to related federal spending drivers, the best way they monetize AI differs significantly. BigBear.ai is aiming to change into a core infrastructure supplier for safe generative AI techniques inside authorities environments, whereas Leidos is more and more deploying AI as an enhancement to its current options in protection, healthcare, aviation and infrastructure.
Earlier than deciding which inventory presents extra near-term alternative, it’s important to guage their fundamentals, strategic positioning and earnings trajectories. Let’s dive deep and intently evaluate the basics of the 2 shares to find out which one is a greater funding now.
The Case for BigBear.ai Inventory
BigBear.ai is in the course of a significant strategic shift from consulting to a scalable AI platform mannequin. Its most necessary transfer is the deliberate acquisition of Ask Sage, a safe generative-AI platform constructed for presidency and nationwide safety use circumstances. Ask Sage already has greater than 100,000 customers throughout 16,000 authorities groups and helps dozens of frontier fashions utilized by the U.S. House Pressure, Military and Protection Well being Company. The deal is anticipated to assist BigBear change into a core expertise participant in protection infrastructure and drive about $25 million in ARR in 2025—roughly six occasions 2024 ranges—highlighting the speedy rise of safe AI demand in mission-critical environments.
Past the acquisition, BigBear.ai is scaling its operational presence by continued deployment of its VeriScan biometric capabilities in main airports, together with Chicago O’Hare, Nashville Worldwide, and Seattle-Tacoma, and thru elevated adoption of its logistics and readiness analytics platforms in each home and worldwide markets. Third-quarter 2025 earnings launch famous that the corporate ended the quarter with a file $456.6 million in money and investments, considerably strengthening its liquidity and enabling extra aggressive strategic execution. This robust capital place offers BigBear.ai expansive optionality, starting from pipeline growth to additional inorganic investments that proceed constructing out a differentiated AI ecosystem.
Regardless of the long-term promise, challenges stay. Income declined 20% yr over yr as a result of decrease Military program volumes and momentary disruptions attributable to the federal government shutdown, which paused some intelligence-community exercise. The corporate reported an adjusted EBITDA lack of $9.4 million, in contrast with breakeven efficiency in earlier quarters, and gross margin compressed to 22.4% from 25.9% final yr. Administration emphasised that about 80% of its authorities applications had been deemed mission-essential throughout the shutdown, which helped restrict deeper income disruption, however the dependence on timing-sensitive federal contracts stays obvious. The Ask Sage integration additionally introduces operational calls for that can require cautious alignment of groups, platforms, and customer-facing techniques over the subsequent a number of quarters.
Even with these near-term pressures, BigBear.ai’s strategic trajectory stays compelling. The mixture of a sharply enhancing liquidity place, a quickly increasing generative AI person base, and a backlog that reached $376 million throughout the quarter positions the corporate for probably outsized profit because the federal authorities intensifies its funding in AI-enabled mission techniques by 2026 and 2027.
The Case for Leidos Inventory
Leidos represents one of the crucial diversified and strategically entrenched gamers within the U.S. protection contracting ecosystem. Its third-quarter 2025 outcomes spotlight the corporate’s sturdiness, scale, and constant execution regardless of the unpredictable authorities atmosphere. Leidos delivered revenues of $4.47 billion, up 7% yr over yr, together with adjusted EBITDA of $616 million and a margin of 13.8%. Administration elevated full-year EPS and margin steerage whereas reaffirming income and money movement targets, signaling elevated confidence in its working momentum.
The corporate’s current contract wins mirror the breadth of its portfolio. These embrace a multiyear $2.2 billion categorised intelligence award, a $760 million NASA human well being and efficiency contract supporting astronaut readiness, a $540 million AI-enabled counterterrorism software program award, a $370 million Division of Protection health-records modernization award, and a 19-year Kazakhstan air-traffic modernization program leveraging its SkyLine-X platform. Leidos additionally posted a book-to-bill ratio of 1.3 within the third quarter and achieved a 27% sequential improve in funded backlog, bringing complete backlog to $47.7 billion. The magnitude of this pipeline gives distinctive multi-year income visibility that few federal contractors can match.
Leidos is advancing its NorthStar 2030 technique with a sharper give attention to AI-driven mission software program, digital modernization, energy-infrastructure engineering and autonomous maritime techniques. AI is now embedded throughout main options—from air-traffic management and counter-UAS to categorised intelligence and energy-grid engineering—and partnerships like Quadridox spotlight its push into next-generation safety expertise.
Efficiency wasn’t even throughout segments. Industrial & Worldwide income dipped, and Protection Techniques margins tightened as early-phase manufacturing elevated the fabric combine. Nonetheless, money movement stays robust at $711 million, and the corporate strengthened its steadiness sheet by paying down $450 million in debt and elevating its dividend by 7.5% over the prior quarter’s dividend.
Whereas BigBear.ai focuses virtually completely on AI-centric innovation, Leidos integrates AI as a drive multiplier inside an already dominant providers and systems-engineering franchise. This positions Leidos as a gentle compounding enterprise with incremental AI upside, relatively than as a high-volatility pure AI play.
How the Shares Carried out Over the Previous 12 months (BBAI vs. LDOS)
BigBear.ai shares have surged 180% over the previous yr, considerably outperforming each the broader Zacks Laptop and Expertise sector, which rose 28.7% and the S&P 500, which superior 15.8%. The inventory’s rally displays speedy investor enthusiasm surrounding its platform transition, strengthening steadiness sheet, and the anticipated contribution of Ask Sage.
Leidos shares rose 16.1% throughout the identical interval, a efficiency that barely exceeded the S&P 500 however lagged the expertise sector. Buyers have handled Leidos much less as a high-growth AI alternative and extra as a reliable federal-contracting compounder with constant execution and a rising dividend profile.
BBAI & LDOS Efficiency
Picture Supply: Zacks Funding Analysis
Evaluating Valuations of BBAI and LDOS Shares
BigBear.ai presently trades at a ahead 12-month price-to-sales a number of of 15.53, far above each the technology-sector median of 6.66X and Leidos’ far decrease a number of of 1.37X. The premium assigned to BigBear.ai displays the market’s anticipation of excessive progress and strategic positioning in safe AI deployments, whereas Leidos’ a number of aligns with its function as a mature, lower-volatility contractor with predictable money flows.
Picture Supply: Zacks Funding Analysis
How Analyst Estimates Are Shifting for BBAI & LDOS
BigBear.ai’s earnings outlook has improved meaningfully. The Zacks Consensus Estimate for its 2025 loss per share narrowed from a lack of $1.10 to a lack of 93 cents over the previous month, and 2026 estimates level to an extra discount in losses to 25 cents. Income forecasts suggest a 16.1% decline in 2025 as a result of one-time disruptions however rebound sharply with anticipated progress of 30.2% in 2026.
BBAI Inventory
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Leidos’ EPS development exhibits regular and constructive momentum. The 2025 EPS estimate elevated from $11.27 to $11.67, representing year-over-year progress of 14.3%, whereas 2026 earnings are anticipated to rise 4.8%. Income progress projections for each years stand at 3.3%.
The divergence displays differing enterprise fashions — BigBear.ai is enhancing quickly from adverse earnings, whereas Leidos continues its trajectory of secure, incremental progress.
LDOS Inventory
Picture Supply: Zacks Funding Analysis
Which Protection-Centered AI Inventory Is the Higher Purchase Now?
Each corporations provide compelling funding narratives. Leidos gives sturdiness, scale, and constant profitability, supported by an enormous backlog, deep buyer relationships, and increasing AI-enhanced capabilities. Its valuation stays cheap relative to its stability, and its capital-return profile continues to strengthen.
BigBear.ai, nevertheless, provides considerably larger near-term upside potential. Its transformation right into a safe AI-platform supplier, the speedy progress trajectory of Ask Sage, its increasing authorities footprint and its strengthened liquidity place all create a state of affairs the place upside optionality is much larger than that of a mature integrator. The enhancing earnings outlook for this Zacks Rank #2 (Purchase) firm suggests stronger momentum behind BigBear.ai at this stage of the AI adoption cycle. You possibly can see the entire listing of at the moment’s Zacks #1 Rank (Robust Purchase) shares right here.
For buyers looking for stability and long-term compounding, Leidos — carrying a Zacks Rank #3 (Maintain) — stays a robust selection. For these prioritizing increased progress potential and extra direct publicity to defense-grade AI acceleration, BigBear.ai seems to be the strong guess proper now with extra upside potential within the close to time period.
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Leidos Holdings, Inc. (LDOS) : Free Inventory Evaluation Report
BigBear.ai Holdings, Inc. (BBAI) : Free Inventory Evaluation Report
This text initially revealed on Zacks Funding Analysis (zacks.com).
The views and opinions expressed herein are the views and opinions of the writer and don’t essentially mirror these of Nasdaq, Inc.
