We recently published a list of the 10 Most Popular AI Penny Stocks to Buy Under $5. In this article, we are going to take a look at where BigBear.ai Holdings Inc. (NYSE:BBAI) stands against other popular AI penny stocks to buy under $5.
Umesh Sachdev, the CEO of Uniphore, recently appeared on CNBC on March 19 to talk about what he calls the ‘the third year of a ten-year AI buildout’. Sachdev shared his perspective on the GPU Technology Conference (GTC) conference during this conversation. GTC is a global AI-focused event held semi-annually that brings together developers, engineers, researchers, and IT professionals to explore advancements in AI, ML, computer graphics, and autonomous machines. Sachdev attended both Jensen Huang’s keynote and spoke on a panel afterward. He highlighted several announcements that caught his attention. These included the Vera Rubin chips and the next-generation Blackwell Ultra chips, which were expected advancements in computing power.
However, what stood out most to him was Huang’s discussion around Agentic AI and physical AI. He explained that AI agents are becoming smarter and beginning to reason. This development is significant for customers like insurance companies, banks, telecom companies, and manufacturing firms. Sachdev noted that AI agents are already assisting employees or replacing certain jobs within these companies, and are performing tasks faster and more efficiently. Similarly, physical AI robots are being implemented in manufacturing setups with guardrails, which showcases early applications of these technologies. He believes these advancements will lead to what he calls an age of abundance, which will ultimately improve free cash flow for many publicly traded companies and create a bright future for AI in the enterprise.
Our Methodology
We sifted through financial media reports and stock screeners to compile a list of the top AI penny stocks that were trading under $5 as of March 24. We then selected the 10 AI stocks that were the most popular among elite hedge funds and that analysts were bullish on. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them, as of Q4 2024. The hedge fund data was sourced from Insider Monkey’s database which tracks the moves of over 900 elite money managers.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A closeup of a computer server rack surrounded by a CAT5 network of cables.
BigBear.ai Holdings Inc. (NYSE:BBAI)
Share Price as of March 24: $2.97
Number of Hedge Fund Holders: 13
BigBear.ai Holdings Inc. (NYSE:BBAI) delivers AI-powered decision intelligence solutions. It offers services in national security, supply chain management, and digital identity through advanced data analytics and ML. The company’s AI platforms process and visualize complex data, and enable predictive insights for sectors like defense, logistics, and transportation.
The company has a strong focus on government contracts. The company’s work with the US Department of Defense (DoD) is a key revenue driver. The company recently secured a 3.5-year, $13.2 million sole-source contract to support the DoD’s ORION Decision Support Platform (DSP). This platform provides automated force management and data analytics that uses BigBear.ai Holdings Inc.’s (NYSE:BBAI) AI capabilities. The company also reported that increased revenue from the Department of Homeland Security and Digital Identity awards contributed to its growth.
In Q4 2024, BigBear.ai Holdings Inc. (NYSE:BBAI) reported revenue of $43.8 million, which was an 8% increase year-over-year. For FY2025, the company projects revenue between $160 and $180 million. It’s focused on the AI sector, particularly in serving the government, and is actively using the DoD’s Tradewinds Marketplace to secure AI/ML procurement contracts.
Overall, BBAI ranks 3rd on our list of the most popular AI penny stocks to buy under $5. As we acknowledge the growth potential of BBAI, our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than BBAI but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.