Palantir Technologies (PLTR 0.93%) stock has doubled so far in 2025, as investors have been buying shares of the software platforms provider to capitalize on the fast-growing demand for its artificial intelligence (AI) solutions.
Palantir's growth has accelerated nicely in recent quarters thanks to its Artificial Intelligence Platform (AIP), which customer use to integrate generative AI tools into their operations to enhance productivity and efficiency. However, the sharp jump in Palantir's stock price this year means that it is trading at an expensive 121 times sales.
The company has the potential to justify its premium valuation in the long run considering the $153 billion annual revenue opportunity that the AI software platforms market is expected to present by 2028. But as any cracks in the company's growth story could send the stock packing.
If you're one of the investors worried about that, it may be a good idea to take a closer look at another AI software platforms company whose sales multiple is only a tenth of Palantir's.
This Palantir alternative is crushing the market in 2025
BigBear.ai Holdings (BBAI 2.08%) is in the business of selling AI software solutions to several U.S. government agencies in areas such as defense and intelligence, border protection, and transportation. It also provides solutions to commercial customers in manufacturing, travel, and supply chain management, among others.
Image source: Getty Images.
BigBear.ai's customers can apply its AI, machine learning (ML), and predictive analytics tools to their data in order to improve their decision-making capabilities. Not surprisingly, investors have been buying this stock hand over fist, believing that BigBear.ai could witness rapid growth in its business in the coming years thanks to the market it is operating in.
NYSE: BBAI
Key Data Points
This explains the 66% surge in the company's stock price in 2025. But what's worth noting is that BigBear is trading at under 12 times sales even after its rally. That's way lower than where Palantir is right now. Of course, some might argue that BigBear.ai's growth is nowhere near that of Palantir's, as evident from the chart below, but there is a good chance that it could step on the gas sooner rather than later.
PLTR Revenue (TTM) data by YCharts
BigBear.ai's growth has started accelerating, and it could keep getting better
BigBear.ai's revenue in 2024 increased by less than 2% to $158 million. Its 2025 revenue guidance of $160 million to $180 million points toward a year-over-year increase of 7.6% at the midpoint. BigBear.ai management says that a "majority of our revenue is derived from federal government contracts," and that's the reason why its growth hasn't been exciting so far.
The company has to depend on government budgets, policies, and priorities, and it says that these factors have the ability to affect its financial performance. The good part is that the company has been taking steps to diversify beyond government contracts. Its acquisition of Pangiam, which was completed in March last year, was a step in that direction.
Pangiam provides vision-based AI solutions that are deployed in applications such as travel, trade, and digital identification. This acquisition should aid BigBear.ai in its strategy of strengthening its core business areas of border security, travel and trade, and supply chain, and also allow it to expand internationally and enhance its customer base.
The company is looking to increase its cross-selling opportunities as well. The Pangiam acquisition should help it in that regard as it now has an additional service to offer to customers. Importantly, BigBear.ai's strategy of moving beyond government contracts seems to be bearing fruit as its revenue backlog increased by 30% year over year in the first quarter to $385 million.
That was well above the revenue growth rate clocked by the company during the quarter. The strong growth in the company's backlog should translate into an acceleration in its top line, and that's precisely what analysts are predicting in 2026.
BBAI Revenue Estimates for Current Fiscal Year data by YCharts
I'm optimistic about the stock for several reasons. Analysts expect BigBear.ai's revenue to grow in double digits next year. The strength of its backlog should allow it to maintain that momentum in the long run, while management's focus on diversifying its customer base and selling more to existing customers should help it boost its revenue pipeline.
As such, investors who missed out on Palantir's tremendous rally, and who are worried it won't continue and are looking for an alternative that's trading at an attractive valuation, would do well to consider BigBear.ai for their portfolios since its accelerating growth could translate into more upside in the future.
