BigBear.ai's Surges Over 25% Amid Defense Contracts, Airport Deployments And Short Squeeze Hype

Artificial intelligence startup, BigBear.ai Holdings Inc. (NYSE:BBAI), has witnessed big spikes in recent weeks, as retail investors seize on rising short interest and swelling options activity to fuel speculations of a short squeeze.

Check out the current price of BBAI stock here.

What Happened: On Tuesday, shares of BigBear rallied 25.12%, ending the day at $5.23 per share, as the company announced a string of strategic partnerships and deployments over the past couple of days.

This includes its biometric ID software going live across major U.S. and international airports, including JFK, LAX, and Chicago O'Hare, according to an announcement made last week. Before this, the company inked a strategic partnership with Easy Lease PJSC to accelerate its AI development and deployment in the Middle East.

BigBear has also had two major Department of Defense wins in 2025, a J-35 force management contract and a geopolitical risk prototype with the DoD’s Chief Digital and Artificial Intelligence Office.

See Also: Google Built Android To Protect Its Ad Empire, Not AI, Says Perplexity’s Aravind Srinivas: Says OS Must Be Reengineered For Agentic Future

All of these were key catalysts for the company, which many analysts have since dubbed “The Next Palantir,” given the remarkable similarities in their areas of focus.

However, the key reason behind recent spikes in the stock is its elevated short interest, with 22.25% of the company’s float, or approximately 65 million shares, being sold short. This is paired with a borrow fee of 4.69%, up from 3.23% two weeks ago, thus making it expensive to short the stock, and making it ripe for a short squeeze.

Options activities have similarly exploded, with over 271,000 contracts being traded on June 24 alone, with 80.97% being calls, fueling speculation that market makers could be forced to hedge by buying shares, something known as a “gamma squeeze.”

There’s also been a lot of chatter surrounding BigBear.ai’s potential short squeeze in popular Reddit communities, and this has been going on for the past several months.

This was from the /r/ShortSqueeze community on Reddit, with several other subreddits now actively discussing the stock, and its potential short squeeze over the next couple of days.

Why It Matters: Analysts maintain a cautiously optimistic outlook on the stock, with a consensus price target at $4.63 per share, 11.47% below its current levels.

According to The Motley Fool, BigBear is expected to underperform for the next five years, since 40% of its revenue is tied to government contracts, which are now under threat as part of DOGE-related cutbacks.

The company continues to disappoint on earnings, with $34.76 million in revenue during its first quarter, missing estimates at $36.26 million, along with a loss of $0.26 per share, higher than estimates at $0.06 per share.

Price Action: Shares of BigBear.ai were up 25.12% on Tuesday, at $5.23, and are up a further 5.05% after hours, at the time of writing this.

The stock scores high on momentum, at the 98th percentile, and has a favorable price trend in the short, medium and long terms. Click here for deeper insights into the stock.

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