Geoffrey Seiler, The Motley Fool

Sat, May 31, 2025, 7:30 AM5 min read

• Palantir and BigBear.ai are artificial intelligence (AI) stocks involved in the defense industry.

• Both companies are also working to move beyond the U.S. government.

• However, their revenue growth and margin profiles are quite different.

• 10 stocks we like better than Palantir Technologies ›

Two of the leading artificial intelligence (AI) stocks over the past year are Palantir Technologies (NASDAQ: PLTR) and BigBear.ai (NYSE: BBAI). Palantir's stock has surged nearly 500% over the past year, while BigBear.ai's stock has jumped more than 150%, as of this writing.

With both stocks performing well, let's look at which one is likely to outperform over the long run.

Both Palantir and BigBear.ai have strong ties to the U.S. federal government and the defense industry. Palantir was founded with the idea that it could take fraud protection tools like those used by PayPal to help uncover hidden threats and protect the U.S. from terrorists following the Sept. 11 terrorist attack.

Palantir's first product, Gotham, can gather and analyze data from a vast and wide array of data sets and has been used by the government for such things as identifying and tracking terrorist financing, as well as locating high-value targets in military zones. The U.S. government remains Palantir's largest customer today, accounting for 42% of its revenue last quarter.

BigBear.ai, meanwhile, was formed when private equity firm AI Industrial Partners merged analytics company BigBear and systems integrator NuWave together, later adding two other analytic companies and taking it public through a special purpose acquisition company (SPAC) back in 2021. The company is largely a government contractor, with a focus on defense, national security, and IT modernization. It has been awarded contracts with a number of government agencies, including the Department of Defense (DoD), National Security Agency (NSA), Department of Homeland Security, and the Federal Aviation Administration (FAA).

Outside the public sector, Palantir's biggest area of growth has come from U.S. commercial customers that have embraced its Artificial Intelligence Platform (AIP), which works as an orchestration layer that allows users to apply AI models to help solve real-world problems. The platform can be used for a plethora of tasks across disparate industries, with everyone from hospital operators to pipeline companies now using AIP.

BigBear.ai's tech also isn't just limited to defense, with it being used in the manufacturing, life sciences, and logistics industries. On the commercial side, you can find its threat detection systems in major U.S. airports like Dallas-Fort Worth and Denver International.