Contemplate Purchasing Discounted AI Shares: A Wise Move?
In the ever-evolving world of artificial intelligence (AI), two companies have been making waves in the market: C3.ai and BigBear.ai. As investors seek to capitalise on the potential growth of AI, it's crucial to evaluate these companies' financials, growth potential, and risks before making an informed decision.
### Financials and Growth
C3.ai reported a robust 25% year-over-year sales growth in fiscal 2025, reaching $389.1 million, with expectations for continued growth in fiscal 2026. In contrast, BigBear.ai showed more modest growth of about 5%, with a heavy reliance on a few large government clients. Both companies remain unprofitable, with C3.ai posting a net loss of $288.7 million in fiscal 2025.
C3.ai's balance sheet is stronger, with $1 billion in assets against $187.6 million in liabilities, indicating financial stability. BigBear.ai's financial specifics are less favourable due to its reliance on government contracts and less diversified revenue.
### Market Exposure and Risks
BigBear.ai depends heavily on federal government contracts, exposing it to risks from federal budget cuts, which are currently expected. This concentration on government spending makes it vulnerable. C3.ai, on the other hand, is more diversified, with only 26% of its revenue coming from government bookings.
BigBear.ai has limited clients and significant revenue concentration, which has already cost them a 19% revenue client from 2022-2024, a concerning trend.
### Valuation and Stock Performance
C3.ai trades at a more compelling valuation with superior sales growth and financial health, making it the “better artificial intelligence stock” compared to BigBear.ai, according to recent analysis. BigBear.ai stock has been volatile in 2025, with a 70% year-to-date gain but also significant drops, indicating higher stock price volatility and risk.
Current stock prices as of early July 2025 are roughly $16.50 for C3.ai and $12.50 for BigBear.ai, suggesting different risk-premium assessments by the market.
### Summary Table
| Aspect | C3.ai | BigBear.ai | |----------------------|----------------------------------|------------------------------------| | Sales Growth (2025) | ~25% YoY ($389.1M) | ~5% YoY; revenue heavily from govt contracts | | Profitability | Unprofitable; net loss $288.7M | Unprofitable; profits dwindling | | Balance Sheet | Strong: $1B assets vs. $187.6M liabilities | Weaker; reliant on few clients | | Revenue Diversification | Moderate (26% govt) | High concentration on govt contracts | | Client Concentration | More diverse | 4 clients = 52% revenue | | Stock Price (July 2025) | $16.50 | $12.50 | | Risk Exposure | Moderate, some govt budget risk | High, dependent on federal budgets |
### Investment Considerations
C3.ai is generally stronger in growth, diversification, and financial stability, making it the preferable choice for investors looking for a relatively safer AI growth stock with potential upside. BigBear.ai offers a more speculative opportunity concentrated in government contracts with higher volatility and risk due to client concentration and budget dependence.
If you prioritise growth and financial health with less risk from government budget cuts, C3.ai is the better option. For those willing to tolerate volatility for a potentially pure-play AI government contractor, BigBear.ai might appeal but carries higher risk.
Given these factors, C3.ai currently stands out as the better investment candidate in terms of financials, growth potential, and risk management.
- Investors should evaluate the financials of C3.ai and BigBear.ai, two AI companies, as they consider investing, considering potential growth, risks, and market exposure.
- C3.ai reported a stronger 25% YoY sales growth, reaching $389.1 million in fiscal 2025, with plans for continued growth, while BigBear.ai showed only a 5% growth, relying heavily on a few large government clients.
- In terms of financial stability, C3.ai's balance sheet is stronger, with $1 billion in assets against $187.6 million in liabilities, compared to BigBear.ai's less favourable financials due to government contract-focused revenue.
- Investors seeking a relatively safer AI growth stock with potential upside should consider C3.ai, as it is stronger in growth, diversification, and financial stability. On the other hand, BigBear.ai offers a more speculative opportunity concentrated in government contracts with higher volatility and risk from government budget dependence.
