Prognostication: Two Artificial Intelligence Shares Expected to Surpass BigBear.ai's Value in the Next Two Years
In a fascinating turn of events, the share price of BigBear.ai (BBAI 12.50%) has skyrocketed an impressive 120% over the past year. However, it's still trading a hefty 70% below its all-time high from April 2022. The company has managed to bounce back, with its revenue growth stabilizing and EBITDA improving.
Initially, investors seemed less than enthusiastic due to dwindling revenue growth in 2023, caused by economic headwinds, intense competition, and the bankruptcy of a major customer, Virgin Orbit. But all that changed under the leadership of Mandy Long, a former executive from IBM. She successfully stabilized the business by acquiring AI vision firm Pangiam, securing new government contracts, and trimming the workforce. The company also struck deals for its AI analytics modules, which can seamlessly integrate into an organization's existing software and edge networks.
Despite the impressive recovery, some analysts are a bit wary, with BigBear.ai's enterprise value priced at a reasonable 6 times its projected sales for 2025. If you're looking for alternative stocks with even more potential, consider two lesser-known AI contenders: Innodata (INOD 3.97%) and Serve Robotics (SERV 6.30%).
Let's start with Innodata, an analytics company that's been quietly making waves since going public back in 1993. The real game-changer came in 2018 when they launched a suite of microservices for preparing data for AI applications. When a company sets out to build a new AI project, 80% of the time is often spent preparing the data, leaving only 20% for actual AI training. Innodata's solution drastically cuts down on that time, making it an excellent choice for companies constantly feeding data into their AI tools.
As the AI market continues to boom, analysts predict Innodata's revenue to grow at an exponential CAGR of 42% from 2023 to 2026. With a current enterprise value of $1.07 billion, it's still a bargain at less than 5 times its promised sales for 2025. As more growth-oriented investors take notice, Innodata might easily surpass BigBear.ai's enterprise value within the next two years.
Next up is Serve Robotics, a developer of autonomous delivery robots, which initially saw the light of day within Postmates before being spun off by Uber Technologies in 2021. With recent advancements in technology, Serve Robotics' new Gen 3 robots can reach speeds of 11mph, travel up to 48 miles on a single charge, and carry 15 gallons of cargo while withstanding heavy rain and extreme temperatures.
While Serve Robotics has only 59 active robots deployed for Uber Eats, the L.A. region as of Q3 2024, the company went public through a reverse merger with a special purpose acquisition company (SPAC) in 2023. Major plans are in the works to deploy 2,000 robots across the Los Angeles and Dallas-Fort Worth metro areas in 2025, which analysts estimate will skyrocket Serve Robotics' revenue to $59.5 million and turn a profit in the process. At just 13 times its projected 2026 sales, Serve Robotics' enterprise value might soon outshine that of BigBear.ai.
In the context of investing, analysts suggest considering alternative AI stocks with potential growth, such as Innodata (INOD 3.97%), which has a current enterprise value less than 5 times its projected sales for 2025. This analytics company has seen significant growth since going public in 1993 and has a promising CAGR of 42% predicted for revenue growth from 2023 to 2026.
In addition, Serve Robotics (SERV 6.30%) is a developer of autonomous delivery robots that has the potential to outshine BigBear.ai's enterprise value. With plans to deploy 2,000 robots in the future, analysts estimate that Serve Robotics' revenue could skyrocket to $59.5 million and turn a profit in 2025, making it an attractive investment opportunity with a current enterprise value of just 13 times its projected 2026 sales. In the world of finance, these lesser-known AI contenders present exciting opportunities for investors looking to diversify their portfolios and potentially see substantial returns.