Identifying stocks that have the potential to make a million dollars or more from a meager investment is every investor’s dream. However, the opportunities are fairly rare. For this to occur, investors must identify a fairly small business dominating its niche that could explode to a much larger use case based on market conditions.

One of the best recent examples of this is Nvidia. A decade ago, with a market cap of $12 billion, it was a company with graphics processing units (GPUs) that experienced massive demand thanks to various trends like cryptocurrency mining and the AI arms race. It has grown to become the world’s largest company, now valued at more than $4 trillion. If you invested $10,000 a decade ago, that’s now worth $3.1 million, easily accomplishing the task of making investors more than $1 million on a reasonably sized investment.

Right now, many investors are looking toward the artificial intelligence industry as a place where the next 100-bagger could be hiding. One stock that investors have identified as a potential millionaire-maker is BigBear.ai (NYSE: BBAI). It checks the boxes laid out above (it’s a $2.2 billion company operating in a growing industry), but can it turn $10,000 into $1 million?

BigBear.ai specializes in providing custom AI solutions to government clients. While it has other clients (like airports that utilize its software to process international travelers through customs), its biggest contract is with the U.S. Army.

BigBear.ai holds a five-year, $165 million contract to provide a Global Force Information Management (GFIM) system. It was awarded this contract about a year ago, so it still has plenty of revenue to realize from this contract. The goal of this job is to provide the Army with AI-powered software to “ensure that the Army is properly manned, equipped, trained, and resourced” for any mission it finds itself on.

These kinds of contracts can open the door for more if BigBear.ai does a great job, but it has run into some headwinds. Various government efficiency efforts have stalled some of this spending, which caused BigBear.ai to report negative revenue growth during Q2. With how large a trend AI is throughout the broader market, a company that specializes in AI reporting negative revenue growth is a huge red flag. Now is the time for companies like BigBear.ai to shine, especially when competitors like Palantir Technologies, which has a large government contract business, are seeing increased government spending.

Unfortunately, that’s not the only red flag for BigBear.ai.

Part of the reason that Nvidia, or even Palantir, has grown into the sizable businesses that they are today is that they offered a base product that was widely adopted by multiple industries. BigBear.ai doesn’t have that. Instead, it’s developing custom solutions for each customer. This limits BigBear.ai’s upside, as it won’t be able to rapidly deploy its AI solutions to the use cases its customers require without a significant number of employees to process the work.

This drags on gross margins, which are quite poor compared to most software companies.

BigBear.ai’s gross profit margins are consistently in the 20% range, which is far from the 70% to 90% gross profit margins that most software companies produce. Instead, I think it would be better to think of BigBear.ai as a consulting firm that employs a ton of people to develop custom solutions for its clients.

With BigBear.ai’s lack of success in the AI arms race, combined with its consulting-like business model, I doubt BigBear.ai has the potential to become a millionaire-maker stock. Instead, investors should turn to some other AI stocks that have massive upside, as there are plenty of them in this sector.

The Motley Fool’s analysts are tracking a massive shift in U.S. tech. Over $1.5 trillion is already flowing into infrastructure, AI, and advanced manufacturing… and the number keeps climbing.

Following a major tariff policy shift, a new AI Gold Rush is taking shape, and we think the real winner is a company 1/100th the size of NVIDIA.

It builds the tech infrastructure that Apple, OpenAI, and others suddenly can’t live without. We just released a full write-up on this under-the-radar stock — and why now might be the exact moment to move.

Continue »

*Stock Advisor returns as of September 22, 2025

Keithen Drury has positions in Nvidia. The Motley Fool has positions in and recommends Nvidia and Palantir Technologies. The Motley Fool has a disclosure policy.

Is BigBear.ai a Millionaire-Maker Stock? was originally published by The Motley Fool