BigBear.ai stock falls 64% in a month

Shares of BigBear.ai Holdings dropped over 60% in one month, ending the recent trading session down about 64%. The company focuses on data analytics and artificial intelligence (AI) but has faced significant volatility in its stock price. This decline raises questions about whether it is a good time for investors to buy or to stay away. Many AI stocks are struggling this year. Factors like competition from cheaper AI models and worries about economic conditions are affecting investor confidence. Even well-known companies, like Nvidia, have seen their stocks decline. Nvidia's market value dropped by 14% recently, which adds to concerns for riskier stocks like BigBear.ai. BigBear.ai's financial performance is not encouraging. For 2024, the company reported only 2% revenue growth, reaching $158 million. Looking ahead, it expects revenue between $160 million and $180 million for 2025. Although it increased its backlog from $250 million to $418 million, this growth is overshadowed by concerns about its cash flow. In the past year, BigBear.ai burned through $38 million in operations, up from $18 million the previous year. This raises concerns about the company's ability to manage its finances. As of the end of 2024, it had just $50 million in cash. Investors should be cautious with BigBear.ai. Despite its lower valuation, there is no guarantee it will recover. If someone is interested in AI stocks, it might be wiser to consider more established companies like Nvidia instead of taking on the risks associated with BigBear.ai.