BigBear.ai Holdings (BBAI) stock skyrocketed 20.29% in Monday's trading session, continuing its impressive momentum after a 46% surge last week. The AI-driven defense and data analytics firm has been grabbing investor attention amid renewed interest in companies operating at the intersection of artificial intelligence and national security.

The company's recent performance has been bolstered by several positive factors. BigBear.ai has secured multiple major government contracts in 2025, including a 3.5-year, $13.2 million sole-source Department of Defense (DoD) contract. Moreover, the company's backlog has grown significantly, increasing 2.5 times from $168 million at the end of 2023 to $385 million by the end of March 2025, providing strong revenue visibility.

Despite facing challenges such as ongoing losses and substantial debt, BigBear.ai's strategic market position in crucial AI applications related to national security is attracting investor interest. The company's solutions, including facial recognition systems for airports and AI-augmented shipbuilding software for the U.S. Navy, are well-aligned with the current geopolitical climate that favors increased defense AI investments. However, investors should be aware that while BigBear.ai represents a high-potential opportunity in the defense AI sector, it also carries significant risks due to its financial challenges and stock volatility.