Artificial intelligence analytics is a burgeoning niche, and BigBear.ai (BBAI Quick QuoteBBAI - Free Report) and Veritone (VERI Quick QuoteVERI - Free Report) have emerged as two notable small-cap players in this space. Both companies offer AI-driven software and solutions that help organizations derive actionable intelligence from data. 

BigBear.ai has built its business around “decision intelligence” for government and defense clients, while Veritone provides an enterprise AI platform (aiWARE) serving media, public sector, and other commercial markets. More clearly, BigBear.ai specializes in mission-critical AI applications for national security, border protection, supply chains, and defense. With deep roots in federal contracting and a growing presence in international markets, BigBear.ai is betting on AI to modernize infrastructure and decision-making in high-stakes environments. On the other hand, Veritone targets commercial enterprises and public safety agencies with a suite of audio/video data analytics tools, content management systems, and its emerging Data Refinery platform, which is gaining traction among hyperscalers and AI model developers.

As government AI budgets expand and demand for clean training data accelerates, both companies appear poised to capitalize. But which stock is better positioned to deliver upside for investors? Let's dive deep and closely compare the fundamentals of the two stocks to determine which one is a better investment now.

The Case for BigBear.ai Stock

BigBear.ai is positioning itself as an emerging leader in AI analytics for defense, intelligence, and critical infrastructure. Management noted early signs that its sharpened strategic focus is resonating in core sectors where it has deep relationships and proven technology – namely U.S. federal defense and security agencies. The firm’s backlog stood at $385 million as of March 31, 2025 – over 2X its anticipated 2025 revenues – thanks to multi-year government contracts. For instance, in late 2024, BigBear won a five-year, $165 million sole-source contract from the U.S. Army to develop the Global Force Information Management system, reflecting its reputation in military analytics. Such deals position BigBear.ai as a key player in the Pentagon’s digital transformation (drawing comparisons to larger peer Palantir [(PLTR Quick QuotePLTR - Free Report) ]). 

BigBear.ai has also expanded via acquisitions like Pangiam (acquired in 2024), which added capabilities in AI-based security and biometric analytics – helping it address homeland security use cases. These moves are opening up new market opportunities in defense, intelligence, cybersecurity, and even commercial sectors like supply chain, where BigBear’s predictive analytics could be applied.

Importantly, BigBear.ai’s financial foundation has strengthened, reducing some risk. During first-quarter 2025, the company eliminated $57.7 million of its long-term debt as certain noteholders voluntarily converted 2029 convertible notes into equity (issuing 16.7 million new shares). It also raised $64.7 million in gross proceeds from warrant exercises, boosting its cash balance to $107.6 million as of quarter-end. With total debt now around $143 million (mostly remaining convertible notes), BigBear.ai’s net debt is modest relative to its market cap. This bolstered balance sheet gives the company runway to continue investing in R&D and executing on its backlog without an imminent need for dilutive financing.

However, there are risks to BigBear’s story. Its contracts are largely with government agencies, which can be subject to delayed funding and long sales cycles. In fact, BigBear cited government funding delays that left it with “excess resource capacity” in the first quarter, contributing to higher operating costs. The company will need to convert its hefty backlog into revenue growth at a faster clip – 2025’s guidance implies an acceleration in the coming quarters to reach $170 million midpoint (versus $126 million in 2024). Profitability is still a way off; gross margin was just 21.3% in the first quarter, reflecting the lower-margin nature of government services compared to pure software businesses. This means BigBear.ai must scale substantially or improve its revenue mix to achieve positive earnings.

The Case for Veritone Stock

Veritone has undergone a strategic transformation, shifting focus solely to its core AI software platform after divesting its media services division in late 2024. This move injected cash and enabled Veritone to hone in on higher-margin software products. By first-quarter 2025, Veritone’s revenue base was entirely from AI Software and Services, despite a 7% year-over-year revenue decline to $22.5 million. However, its Annual Recurring Revenue (ARR) reached $58.7 million from 3,156 software customers, with 81% derived from subscriptions. This positions Veritone for more predictable, SaaS-like revenue streams, highlighted by a strong 61.1% GAAP gross margin, three times higher than BigBear.ai’s.

Veritone’s growth strategy centers on vertical-specific AI solutions, including the Veritone Data Refinery, which curates large datasets for AI model training. The product is seeing early success, with a growing pipeline and partnerships with AI cloud providers. Another key growth area is the public sector, with contracts like the one signed with the U.S. Air Force to deploy AI tools for law enforcement. This shows Veritone expanding into government applications, encroaching on BigBear.ai’s market, but with a focus on software rather than large custom contracts.

Despite facing high leverage and investor concerns, Veritone has improved its financial position. It raised capital and cut costs, eliminating up to $10 million in annual expenses. Management expects profitability by the second half of 2026, with updated guidance forecasting 18% year-over-year revenue growth and a reduced net loss in 2025. The company’s Q1 bookings were up 22% year over year, suggesting a return to growth in the second half of 2025.

Compared to BigBear.ai, Veritone’s model is less about massive one-off contracts and more about scalable software sales, which could command higher margins and more predictable revenue.

There are, however, challenges. Veritone is still losing money and must execute well to hit its growth targets. Its first-quarter revenue decline was partly due to lower consumption by some major customers (e.g., reduced usage fees from a large client like Amazon, according to one report), revealing that reliance on a few big customers is a vulnerability. The company’s debt load remains high relative to its size, which could be problematic if business falters or if credit markets tighten (the convertible notes due 2026 will eventually need refinancing or conversion).

BBAI & VERI Stock Performances

Investors’ interest in these names has been volatile. BigBear.ai’s stock has skyrocketed over the past year (up nearly 382%) on optimism about its defense AI contracts, whereas Veritone’s shares have only recently begun rebounding from a deep slump (the VERI stock skyrocketed 111.1% in the past month versus a 40.9% rise of BBAI stock).

BigBear.ai shares have soared 153.3% over the past three months, significantly outpacing the Zacks Computer and Technology sector’s 26.2% advance and far exceeding the broader S&P 500’s performance. In comparison, Veritone stock has also posted a solid gain of 25.9% during the same timeframe.

Share Price Performance

Image Source: Zacks Investment Research

Valuation of BBAI & VERI Stocks

Although BigBear.ai’s growth story is compelling, its valuation raises red flags. The stock currently trades at a forward 12-month Price-to-Sales (P/S) ratio of 12.02—well above Veritone’s 1.13X. Over the past three years, BBAI’s P/S ratio has fluctuated between 0.51 and 13.43, underscoring the stock’s volatility and the extent to which investor optimism drives pricing. Put simply, much of the expected success appears already baked into the stock. That said, for risk-tolerant investors, BigBear.ai’s high-growth trajectory and expanding role in AI may still justify the premium.

Veritone, by contrast, looks far more attractively valued. With an expected 18% revenue increase in 2025 and significantly narrowing losses, the company is showing signs of an earnings rebound. Its progress in launching new AI offerings and securing public sector contracts further.

Ultimately, BigBear.ai represents a high-risk, high-reward play, while Veritone offers a more modest growth path at a much more reasonable valuation.

P/S (F12M)

Image Source: Zacks Investment Research

Estimate Revision Trend for BigBear.ai and Veritone

BBAI’s bottom-line estimates for 2025 have remained unchanged at a loss of 41 cents over the past 30 days. Yet, the estimated figure for 2025 implies a year-over-year improvement from a loss of $1.10 per share a year ago.

For BBAI Stock

Image Source: Zacks Investment Research

For Veritone, loss estimates for 2025 have narrowed in the past 30 days to 58 cents per share. The estimated figures for 2025 indicate an improvement from the year-ago reported loss of 80 cents per share.

For VERI Stock

Image Source: Zacks Investment Research

Conclusion

Based on the analysis, Veritone presents a more attractive investment opportunity compared to BigBear.ai for the time being. While BigBear.ai — a Zacks Rank #3 (Hold) company — is on a high-growth trajectory, particularly with its government contracts, its elevated valuation and lack of near-term profitability make it a higher-risk proposition. The stock's 12.02 P/S ratio is significantly inflated compared to Veritone’s 1.13X, indicating that much of its potential success is already priced in.

In contrast, Veritone, with its more predictable SaaS model and growing presence in the public sector, offers a more attractive valuation and a clearer path to profitability by 2026. This Zacks Rank #2 (Buy) company’s recent turnaround, coupled with solid growth in its AI-driven platforms, makes it a strong contender for upside potential, especially at a reasonable price. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Therefore, investors should consider buying Veritone for its attractive valuation and growth prospects, while holding BigBear.ai for its high-risk, high-reward potential in defense AI.