AI Stocks Backed by U.S. Government

Published Date : 18/07/2025 

Discover how Palantir Technologies and BigBear.ai are leading the charge in integrating artificial intelligence into the U.S. federal government, with significant growth potential for investors. 

Artificial intelligence (AI) has become an integral part of our daily lives, from voice assistants on smartphones to personalized recommendations when shopping online or watching videos. However, you may not realize that AI is also deeply embedded in the U.S. government. The federal government is working with several companies to increase the use of AI in critical projects. In this article, we will focus on two leading players: Palantir Technologies (PLTR) and BigBear.ai (BBAI).

Palantir Technologies is a clear leader in the AI and federal government space, known for its dynamic growth in stock value. Over the last 12 months, Palantir's stock has surged by 414%, and it has seen a nearly 90% increase in 2025 alone. Just a year ago, shares were available for less than $22 each. This growth is largely attributed to the release of Palantir's Artificial Intelligence Platform (AIP), which integrates large language models into its Gotham and Foundry platforms. These platforms are designed for government and commercial clients, respectively.

The AIP allows users to craft detailed prompts, enabling real-time decision-making by providing insights from numerous data points. This is particularly crucial in battlefield situations, where Palantir can process information from hundreds of satellites to provide commanders with vital data to achieve objectives and protect troops.

Palantir is also expanding its role beyond the military, working with various federal agencies. These include the Department of Homeland Security, the Department of Health and Human Services, and potentially the Social Security Administration and the Internal Revenue Service. The goal is to create a centralized government database, an objective that was initially championed by Elon Musk when he headed the Department of Government Efficiency (DOGE). Despite Musk's departure from the administration, the work continues.

However, Palantir's high valuation, with a price-to-earnings (P/E) ratio of 617 and a forward P/E of 250, may deter some investors. Despite this, Palantir is considered a revolutionary stock with significant potential for future growth, making it a compelling buy for many investors.

BigBear.ai, while not as prominent as Palantir, is another company to watch in the AI and government sector. It works with the Pentagon and intelligence agencies, though not to the same extent as Palantir. BigBear.ai has secured several significant contracts, including a $13.2 million award in March for the chairman of the Joint Chiefs of Staff. This contract involves modernizing and maintaining the Orion Decision Support Platform, which provides analytics and automated force management capabilities to the Department of Defense.

Additionally, BigBear.ai won a $165 million contract to modernize U.S. Army systems with integrated, data-driven force management platforms. These contracts are substantial for a company that reported only $34.8 million in revenue in the first quarter of 2025. The company's revenue growth is modest at 5% year-over-year, but it now has a backlog of $385 million in contracts.

BigBear.ai is also making strides toward profitability. In the first quarter, it reported a loss of $62 million, a significant improvement from the $127.8 million loss in the first quarter of 2024. The company's guidance for full-year revenue is between $160 million and $180 million, compared to $158.2 million in 2024.

For investors looking for the next Palantir, BigBear.ai is a promising option. Despite its current losses, the company's price-to-sales (P/S) ratio of just over 10 is more appealing than Palantir's P/S ratio of 113.5.

In conclusion, both Palantir Technologies and BigBear.ai offer significant growth potential for investors interested in the intersection of AI and the federal government. While Palantir is a well-established leader, BigBear.ai is a rising star with a solid foundation and promising contracts. 

Frequently Asked Questions (FAQS): 

Q: What is Palantir Technologies known for?

A: Palantir Technologies is known for its dynamic growth in stock value and its Artificial Intelligence Platform (AIP), which integrates large language models into its Gotham and Foundry platforms for government and commercial clients.

Q: What significant contracts has BigBear.ai secured?

A: BigBear.ai has secured a $13.2 million contract for the chairman of the Joint Chiefs of Staff and a $165 million contract to modernize U.S. Army systems with integrated, data-driven force management platforms.

Q: Why is Palantir expanding beyond military applications?

A: Palantir is expanding its role beyond the military to work with various federal agencies, including the Department of Homeland Security, the Department of Health and Human Services, and potentially the Social Security Administration and the Internal Revenue Service, to create a centralized government database.

Q: What is the current financial status of BigBear.ai?

A: BigBear.ai reported a loss of $62 million in the first quarter of 2025, a significant improvement from the $127.8 million loss in the first quarter of 2024. The company has a backlog of $385 million in contracts and expects full-year revenue between $160 million and $180 million.

Q: What is the price-to-sales ratio of BigBear.ai?

A: BigBear.ai's price-to-sales (P/S) ratio is just over 10, which is more appealing than Palantir's P/S ratio of 113.5. 

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