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Artificial intelligence (AI) is a hot sector to invest in, and the fervor over AI is understandable. The tech has been hailed as “the next major wave of computing” by Microsoft CEO Satya Nadella.
A number of businesses are using AI to transform industries. Two such companies are BigBear.ai (BBAI -4.78%) and C3.ai (AI -1.58%). The former employs AI to assist the defense and national security sectors. The latter delivers turnkey and custom AI software to organizations across several industries.
Deciding what is the most productive investment in AI is not a transparent choice. Let’s communicate about Bigbear. AI and C3. AI to evaluate both.
C3.ai has prospered amid the rapid rise in demand for AI. The firm’s ability to quickly deliver turnkey AI applications is a strength, and adding to this is a robust partner network helping it drive business growth.
For example, in September, C3.ai formed a partnership with Microsoft where the latter’s sales team will sell C3.ai’s solutions. Also, its partnership with Alphabet-owned Google Cloud contributed to the partner network closing 62% of all deals in C3.ai’s fiscal second quarter, ended Oct. 31, 2024.
His partners helped C3. AI to succeed in a tax turnover at the time of $ 94. 3 million, a strong construction of 29% in the other. Of this, 86% represented the source of income from subscriptions. This is a force because subscriptions supply a source of recurrent income C3. AU.
The company’s Q2 sales growth led C3.ai to forecast revenue between $378 to $398 million for its 2025 fiscal year. This is good growth over the prior year’s $310.6 million.
Despite its strength, C3. A is not profitable. It left the moment in the quarter with a net loss of $66 million. However, it is downplayed relative to the net loss of $70 million in the last year, showing that C3. Ai is trying to manage costs.
Bigbear. ai supplies AI software for defense and national security. For example, your AI traveler photographs scans of Denver International Airport to verify your identity. Its consumers come with the U. S. Air Force and Army, and it added the military on Jan. 30.
In the third quarter, BigBear.ai experienced strong sales growth of 22% year over year to $41.5 million. Though that kind of increase is excellent, part of that came from last year’s acquisition of facial recognition firm Pangiam rather than organic growth.
In fact, looking at the company’s first three quarters of 2024, its $114.4 million in sales is down from 2023’s $114.6 million. This is a disappointing outcome for an AI company, but BigBear.ai estimates it will wrap up 2024 with revenue in the range of $165 million to $180 million, which is an increase from 2023’s $155.2 million.
Also, the raw margin of Bigbear. ai 26%, which is horrible for a software company. Compare this to the T-Q2 gross fiscal margin of C3. AI of 61%.
With such poor margins, it is unexpected that Bigbear. ai is profitable. It posted a net loss of $12. 2 million in the third quarter. Many tech corporations sacrifice profits to make their corporations bigger as temporarily as possible, however, sales expansion on Bigbeararrayi has been consistent. This makes its lack of profitability, namely, worrying.
Perhaps that will be replaced by the new CEO Kevin Mcaleenan, who occupied the most sensible place on January 15. It was the first mandate of the Secretary of Security of the Homeland of the Heritage of the Homeland. With the return of President Trump, the good appointment of Ms. Mcaleenan May May only assistance Bigbear. AI expands his government activities.
After having Bigbear. AI and C3. AI, at this stage, the latter turns out to be the most productive inventory of synthetic intelligence, taking into account its most powerful finances and its expansion in consistent sales. But there is nothing more to discover.
The C3. AI spouse network is the key to its success, and one of its greatest spouses is with the Power Corporate Baker Hughes, which sells C3. Ai responses to the oil and fuel industry. The spouse expires in April of this year.
If the association is not renewed, the loss can be devastating for C3. AI. Some estimates imply that Baker Hughes is guilty of a third of the sales of C3. AI. This wrinkle makes it more difficult between c3. ai and bigbear. ai.
Currently, the ideal course of action is to wait to invest in one or the other of the companies. C3. AI may be the most productive long-term investment option, however, it’s more productive to see if the Baker Hughes Association is renewing first.
As for BigBear.ai, if its Q4 sales result in double-digit year-over-year growth, like it did in Q3, then that’s an encouraging sign. Since it has a new CEO, BigBear.ai’s performance should be monitored for a few quarters to see if Mr. McAleenan can deliver consistent sales growth and strengthen company financials before considering an investment.
Suzanne Frey, director of Alphabet, is a member of the board of directors of The Motley Fool’s. Robert Izquierdo has positions in Alphabet and Microsoft. Motley Fool has positions and recommends Alphabet and Microsoft. The Motley Fool recommends C3. AI and recommends the following options: Long January 2026 395 calls in Microsoft and Court January January 2026 405 $ calls to Microsoft. The silly fool has a dissemination.
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