BigBear.ai (BBAI 2.66%) has attracted a lot of attention on Wall Street over the past few years for its AI data analytics platform. The company sells its services to the U.S. government and private companies, and some investors hope it could be the next Palantir.
Excitement about AI in general and BigBear.ai's prospects specifically have helped push its share price up by an impressive 152% over the past three years. But there are some warning flags flying, among them the company's 20% revenue decline in the third quarter, the fact that it isn't profitable, and that its losses are widening.
On top of all of this, BigBear.ai's stock is pricey, with a price-to-sales ratio of nearly 13 right now compared to the tech sector's average P/S ratio of less than 9. With so many reasons to worry about BigBear.ai's investment thesis, retail investors would do better to look elsewhere. With that in mind, here are two great AI stock alternatives to buy now.
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AI memory demand is through the roof
If a fast-growing AI company with lots of upside potential is what you're looking for, look no further than memory maker Micron Technology (MU 3.21%). The company's NAND flash and dynamic random-access memory (DRAM) products are in high demand as tech companies rush to build AI data centers.
How in demand, exactly? Well, Chief Business Officer Sumit Sadana told investors on Micron's earnings call last month that the company was "more than sold out" at the end of its most recent fiscal quarter. This makes it a classic pick-and-shovel investment in the midst of an AI gold rush. And with an estimated $3 trillion to $4 trillion estimated to be spent on AI infrastructure by 2030, there are likely plenty of picks and shovels still to be purchased.
And, unlike BigBear.ai, Micron's sales are rising, and the company is profitable. Revenue rose 57% to $13.6 billion in the first quarter of its fiscal 2026, and non-GAAP (adjusted) earnings per share increased 167% to $4.78.
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The emerging AI leader is hiding in plain sight
I know Alphabet (GOOG 1.69%) (GOOGL 1.66%) isn't as exciting as some other AI stocks out there, unless you find an expanding position in AI, massive sales, and a profitable business to be exciting (which you should).
Alphabet's AI play comes mainly from its Gemini chatbot, which now has 650 million monthly active users, up from 400 million about eight months ago. Alphabet is about to expand Gemini's reach as well. Apple recently selected it to be the underlying AI model for a new version of Siri that will debut later this year. Aside from putting Gemini in more hands, Alphabet will receive an estimated $1 billion from Apple annually.
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In Alphabet's third quarter, its total sales rose 16% to $102 billion, and its earnings jumped 35% to $2.87 per share. While previously, there were concerns that the growing use of AI could erode Alphabet's dominance in its core search market, the company is now well positioned to benefit from artificial intelligence with its Gemini chatbot at the center of its AI strategy.
Both Micron and Alphabet are clear leaders in their respective AI niches right now, and with demand rising for each of their products in the space, it's likely they could maintain their dominant positions for years to come. Just remember that tech stocks have been volatile lately, so some short-term share price fluctuations are to be expected.
