2 artificial intelligence (ai) stocks the u.s. government wants to support

Unlocking Growth: How the U.S. Government is Fueling AI Stock Opportunities

Artificial intelligence (AI) is no longer a futuristic concept; it's deeply embedded in our daily lives, from smartphone assistants to personalized online experiences. But beyond consumer applications, AI is rapidly becoming a cornerstone of U.S. government operations. The federal workspace is increasingly leveraging AI for critical projects, creating significant investment opportunities in companies that partner with the government.

Today, we'll delve into two such companies: Palantir Technologies and BigBear.ai. These firms are at the forefront of integrating AI into federal initiatives, offering unique ways to invest in the burgeoning influence of artificial intelligence within the government sector.

Palantir Technologies: The AI Powerhouse for Government and Beyond

When considering AI and the federal government, Palantir Technologies (PLTR) often comes to mind first, and for good reason. The company has seen explosive growth, with its stock surging over 400% in the past year. This impressive performance is largely attributed to its Artificial Intelligence Platform (AIP).

Palantir's AIP integrates advanced large language models into its existing Gotham and Foundry platforms. Gotham caters to government clients, while Foundry serves commercial entities. This integration empowers users to craft detailed prompts, allowing Palantir to extract insights from vast datasets and facilitate real-time decision-making. This capability is particularly vital in sensitive areas like battlefield intelligence, where Palantir can process information from hundreds of sources to provide commanders with crucial data, enhancing operational efficiency and troop safety.

Beyond defense, Palantir is reportedly expanding its governmental footprint, collaborating with agencies such as the Department of Homeland Security, the Department of Health and Human Services, and potentially even the Social Security Administration and the Internal Revenue Service. The objective? To establish a centralized government database, a monumental undertaking that underscores Palantir's strategic importance despite the inherent controversies of such initiatives.

While Palantir's valuation metrics, like its staggering price-to-earnings (P/E) ratio of 617 and a forward P/E of 250, might deter some investors, its revolutionary potential and long-term growth trajectory suggest it remains a compelling opportunity for those looking to invest in disruptive AI technology.

BigBear.ai: The Emerging AI Player on the Government Stage

While not yet at Palantir's scale, BigBear.ai (BBAI) is an AI company certainly worth monitoring for its growing involvement with the Pentagon and other intelligence agencies. Its consistent expansion of government contracts highlights its potential for significant future growth.

BigBear.ai recently secured a notable $13.2 million contract in March with the chairman of the Joint Chiefs of Staff. Under this agreement, the company is tasked with modernizing and maintaining the Orion Decision Support Platform, a critical system that provides analytics and automated force management capabilities to the Department of Defense. This demonstrates the company's ability to handle essential governmental infrastructure.

Furthermore, BigBear.ai commenced a substantial $165 million contract late last year. This multi-year agreement focuses on modernizing U.S. Army systems, implementing integrated, data-driven force management platforms. These contracts are substantial, especially for a company that reported $34.8 million in revenue in the first quarter of 2025.

Despite a modest 5% year-over-year revenue growth, BigBear.ai boasts a robust backlog of $385 million in contracts, signaling strong future revenue streams. Perhaps even more importantly, the company is making tangible progress toward profitability. Its first-quarter loss of $62 million in 2025 marks a significant improvement from the $127.8 million loss incurred in the same period of 2024. The company's full-year revenue guidance between $160 million and $180 million for 2025 (compared to $158.2 million in 2024) further solidifies its path.

For investors seeking the "next Palantir," BigBear.ai presents an intriguing prospect. While it is still operating at a loss and therefore lacks a P/E ratio, its price-to-sales (P/S) ratio of just over 10 is considerably more attractive than Palantir's P/S ratio of 113.5. This lower valuation could indicate significant upside potential as the company continues to execute on its government contracts and moves closer to profitability.

Investing in the AI-Powered Future of Government

The U.S. government's increasing reliance on artificial intelligence creates a fertile ground for investment. Both Palantir Technologies and BigBear.ai offer distinct entry points into this evolving landscape. Palantir, a proven leader with rapid expansion, continues to redefine government data utilization. BigBear.ai, on the other hand, represents a compelling growth story with substantial government contracts and a clear trajectory toward financial stability. As AI permeates every facet of our world, understanding its role in critical government functions can uncover powerful investment opportunities.