The country is in a hurry to embrace artificial intelligence (AI). As nvidia CEO Jensen Huang explained that “countries around the world recognize AI as a critical infrastructure, like electricity and the Internet.”
The Trump administration shows that the United States intends to lead the world in AI. The two companies that help the government achieve this goal are bigbear.ai(NYSE: BBAI) and c3.ai(NYSE: AI).
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The companies provide AI solutions to the US Army and the Department of Defense, among others. But if you have to choose between two, which inventory is better AI investment over the long term? Let's take a look at each business to answer that question.
Image source: Getty Images.
Pros and Cons of bigbear.ai
Bigbear.ai offers a variety of AI solutions focused on national security and infrastructure. For example, it offers facial recognition software to many airports to screen passengers to screen passengers for security risks, and helps the US Navy build submarines with Ai-Enhanced shipbuilding software.
Bigbear.ai's business provided $34.8 million in the first quarter, up 5% year-on-year. It also benefited from the exercise of the 2024 warrant for an adjustment of $64.7 million in total revenue.
The company experienced a leadership change this year. The CFO left in June and acquired new CEO Kevin McCallinan in January. McCallinan served as acting executive director of the US Department of Homeland Security during the first Trump administration, so his experience proved to be beneficial to BigBear.AI's government business.
However, the company faces several challenges. bigbear.ai is not beneficial. The net loss totaled $62 million in the first quarter. Some of those operating expenses increased year-on-year.
Bigbear.ai also has considerable debt. The first quarter total liabilities were included in $185.5 million, including long-term debt of $107 million, after a voluntary conversion of the Convertible Note in 2029 reduced the amount by $58 million. The assets totaled $396.3 million in the first quarter.
Diving at c3.ai
C3.AI offers off-the-shelf custom AI solutions. Government clients include the US Air Force, Marine Corps and the National Science Foundation. We also boast a considerable non-governmental business with clients such as exxonmobil and Dow.
The company is leveraging its partnership to expand its sales reach. The partners have closed 193 contracts for 2025 C3.AI for 2025, which ended April 30th. This represents 68% year-on-year growth and 73% of total contracts.
As a result, C3.AI sales increased 25% year-on-year to $389.1 million in fiscal year 2025. The company expects the 2026 fiscal year to start with sales of at least $100 million.
Like bigbear.ai, c3.ai is not beneficial. FY2025 ended with a net loss of $288.7 million. But the balance sheet was healthy. The assets totaled $1 billion in the fourth quarter, while the total liability was $187.6 million.
Select bigbear.ai and c3.ai
Both companies were looking at sales growth to start the year, but the rest of 2025 could be a different story. The US government is cutting its budget.
Budget cuts can damage BigBear.ai's business. The company said “majority of the revenue comes from federal contracts.”
The photos differ for c3.ai. Federal bookings accounted for 26% of the total in 2025. As a result, budget cuts can hurt C3.AI, but its impact on business is less than its impact on BigBear.ai.
C3.AI's diverse revenues are positive over BigBear.ai, but another factor to look at when deciding which is a better investment is stock valuation. This can be determined by reviewing the price-to-sales (P/S) ratio of each company.
Data by ycharts.
As the chart shows, both companies now have a much more reasonable P/S multiple compared to their peaks over the past year. For comparison, the P/S ratio for AI leader Nvidia is 24 as of June 18th. This shows that the bigbear.ai and c3.ai stocks are priced attractively.
That said, Bigbear.ai's P/S ratio remains higher than a year ago, but C3.AI is lower. This suggests that C3.AI stocks are of good value, but its AI rivals are not a bargain for 2024.
If stacked against bigbear.ai, c3.ai's persuasive ratings, excellent sales growth and a strong balance sheet make it a better AI investment in the long term.
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Robert Izquierdo has positions in C3.AI and Nvidia. Motley Fool has a job at Nvidia and recommends. Motley's Fool recommends c3.ai. Motley Fools have a disclosure policy.
