Why BigBear.ai Stock Jumped This Week

BigBear.ai (NYSE: BBAI) stock posted big gains across the last week of trading. The software company's share price closed out the stretch up 5.4%, according to data from S&P Global Market Intelligence. Meanwhile, the S&P 500 index gained 1.7%, and the Nasdaq Composite index climbed 1.6%.

In addition to bullish momentum for the broader market, BigBear.ai stock posted gains in conjunction with moves made by President Trump. In his first week back in office, Trump rescinded a Biden-era executive order on artificial intelligence (AI) and issued his own order for the technology category.

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BigBear.ai stock climbs on Trump AI moves

President Trump's inauguration was held on Jan. 20, and the new president kicked off his new term in office by rescinding an executive order enacted during the Biden administration governing the progression of AI. By canceling Biden's executive order on AI, Trump removed the need for private companies to report details about AI development to the federal government. Revoking the order also eliminated the need for private companies to ensure their AI initiatives were in line with a series of other guidelines outlined during the Biden administration.

Trump followed up the move on Thursday by issuing his own executive order on AI, which the president said was intended to remove barriers to domestic AI innovation. The order has formed an advisory group that will put forth an AI action plan within 180 days. As part of Trump's new order, "all policies, directives, regulations, orders, and other actions taken" regarding AI under the Biden administration will also be reviewed.

Investors broadly see Trump's approach as creating a more favorable growth backdrop for AI, and it helped power significant gains for BigBear.ai stock this week. On the other hand, the company's share price did see a pullback later in the week in conjunction with fluctuations in the broader market and insider selling disclosures. Shares had been up as much as 17.1% from the previous week's market close, but gains moderated due to these factors.

What comes next for BigBear.ai?

BigBear.ai recently named Kevin McAleenan its new CEO. Some investors are hoping his experience with the previous Trump administration and working with U.S. national security agencies will help the company land more contracts.

BigBear.ai's management had previously noted that it was seeing some hesitance from government customers when it came to AI spending. It's possible that new leadership will strengthen the company's ability to land deals with key public sector customers. But the stock is also up 123% over the last year and is looking riskier on the heels of those gains.

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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.