Investing

BigBear.ai Bounces Higher on Institutional Speculation in Artificial Intelligence

Joshua Enomoto

Published: February 6, 2023 3:58 am

Last Updated: February 6, 2023 12:00 pm

Amid a stable market session gone sour on Friday, artificial intelligence-powered analytics and cyber solutions specialist BigBear.ai (US:BBAI) contributed much of the fireworks, gaining over 44% ahead of the weekend. In the year so far, BBAI stock enjoyed a blistering performance, skyrocketing 611%. In part, institutional support for AI-related initiatives bolstered BigBear.ai and related enterprises.

Throughout the business week ended Feb. 3, earnings disclosures from the biggest technology firms articulated the importance and forward viability of AI-integrated protocols. On Wednesday, Meta Platforms (US:META), which owns the social media juggernaut Facebook, revealed how the innovation boosted its fiscal performance during its fourth-quarter conference call.

“Our community continues to grow and I’m pleased with the strong engagement across our apps. Facebook just reached the milestone of 2 billion daily actives,” said Mark Zuckerberg, Meta founder and CEO. “The progress we’re making on our AI discovery engine and Reels are major drivers of this. Beyond this, our management theme for 2023 is the ‘Year of Efficiency’ and we’re focused on becoming a stronger and more nimble organization.”

Further, International Business Machines (US:IBM) posted per-share profitability that was in line with analysts’ expectations, while also beating the consensus revenue target. Notably, IBM chief executive Arvind Krishna cited AI as a strong contributing factor to its Q4 results.

“Our solid fourth-quarter performance capped a year in which we grew revenue above our mid-single digit model. Clients in all geographies increasingly embraced our hybrid cloud and AI solutions as technology remains a differentiating force in today’s business environment”, stated Krishna.

Activity in the derivatives market for BBAI stock demonstrates rising interest in call options, which generally carry bullish implications. During the Jan. 12 session last month, BigBear.ai represented one of the highlights of Fintel’s screener for unusual stock options volume. At the time, call volume reached 19,606 contracts (against the average call volume of 28) compared to put volume of 12,486 (versus average put volume of 6).

For the Jan. 30 session, call volume hit 29,167 contracts (against the average 2,649) while put volume pinged at 1,904 (versus the average 1,596).

Aspirational beliefs among the top tech players catalyzed BBAI stock this past week, which nearly doubled in market value. For instance, during IBM’s Q4 conference call, Krishna remarked that “AI is projected to contribute $16 trillion to the global economy by 2030, including a massive boost in productivity by infusing AI into every enterprise process.”

Notably, Krishna’s forecast represents a considerable leap up from other expert projections. For instance, while analysts at Grand View Research anticipates that the global AI industry will expand at a compound annual growth rate of 37.3% between 2023 to 2030, the culminating revenue tally would amount to “only” $1.81 trillion per their projections.

Since making its public market debut via a reverse merger with a special purpose acquisition company (SPAC), BBAI stock gave up 46% of equity value.

This article originally appeared on Fintel