Some investors and tech industry analysts are worried about the possibility that the artificial intelligence (AI) industry is in a bubble. Major tech companies like Alphabet, Microsoft, and Meta Platforms are investing hundreds of billions of dollars to build data centers and infrastructure to support the AI software systems being developed. These highly profitable companies can afford to take some risks on AI investments, even if their buildouts don’t pay off.

But to see the full picture of a possible AI bubble, it helps to also look at smaller companies with business models that depend solely on selling AI services and solutions. BigBear.ai (NYSE: BBAI) offers AI solutions that help businesses and government agencies make real-time decisions based on advanced analytics, and it has been getting more attention from investors recently.

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So far in 2026, BigBear.ai stock is up 9.8%, and in the past year, it has gained 33.6%. For comparison, the S&P 500 index has gained 13.6% in the past 12 months and 1% year to date. But this AI stock has experienced some major volatility over the years, and it’s still down by about about 38% from the price at which it went public in December 2021 via a reverse merger with a special purpose acquisition company (SPAC). And it’s still facing a few big risks that could lead to more share price declines.

Will BigBear.ai post bigger gains in 2026, or could it become a cautionary example of stocks that fall too far to recover?

It takes most tech start-ups and software companies years to start earning profits. But BigBear.ai has lost money every year since it went public. It hasn’t yet reported its final 2025 figures, but it’s on track to deliver another year in the red.

In November 2025, the company reported net income of $2.5 million for the third quarter. But that positive figure was the result of accounting adjustments in how the company valued its derivative liabilities. If not for that change to its non-cash income, BigBear.ai would have reported a loss for a fourth quarter in a row.

Investors in growth tech stocks are often willing to be patient about profitability if the company’s revenues are growing. But BigBear.ai is struggling on that front, too.

Its revenue declined from $43.8 million in the fourth quarter of 2024 to $34.8 million in the first quarter of 2025, and fell again to $32.5 million in the second quarter. Although it reported a small uptick to $33.1 million in Q3, there’s still reason to be concerned.