Super Micro Computer (SMCI 1.18%) and BigBear.ai (BBAI -1.72%) represent two different ways to invest in the artificial intelligence (AI) market. Super Micro Computer, more commonly known as Supermicro, produces dedicated AI servers. BigBear.ai develops AI modules that can be plugged into edge networks to accelerate and automate certain tasks.

Both stocks are trading far below their all-time highs. Supermicro's stock, which closed at an all-time high of $118.81 on March 13, 2024, has dropped to about $33. BigBear.ai's stock, which closed at a record high of $12.69 on April 13, 2022, trades at less than $3. Let's see why these two AI stocks fizzled out -- and if either one is still worth buying today.

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Supermicro is overcoming some major problems

Supermicro controls a much smaller slice of the server market than Hewlett Packard Enterprise or Dell, but it established an early-mover advantage in the dedicated AI server market with its liquid-cooled systems. Its close relationship with Nvidia also provided it with a steady supply of the chipmaker's high-end data center GPUs for processing AI tasks.

Those advantages made Supermicro one of the market's hottest AI stocks. Its revenue grew 46% in fiscal 2022 (which ended in June 2022), 37% in 2023, and 110% in 2024.

But last August, a prolific short seller accused it of inflating its revenues. It subsequently delayed its 10-K filing for fiscal 2024, and it lost its auditor Ernst & Young in October. In November, it received a non-compliance letter from Nasdaq and its financial statements were subpoenaed by the Securities and Exchange Commission and the Department of Justice.

As it faced those daunting challenges, Supermicro's stock sank to a one-and-a-half year low of $18.01 on Nov. 14. However, it bounced back over the following months as it hired a new auditor, finally filed its overdue 10-K, and kept its listing.

Supermicro's revenue more than doubled year over year in the first half of fiscal 2025, and it anticipates 74%-101% growth for the full year as the AI boom continues. From fiscal 2024 to fiscal 2027, analysts expect its revenue and EPS to grow at a compound annual growth rate (CAGR) of 38% and 22%, respectively. Those are explosive growth rates for a stock that trades at just 10 times next year's earnings.

We should take those bullish estimates with a grain of salt -- since higher tariffs will likely throttle Supermicro's near-term sales and squeeze its margins. But it could emerge as a stronger company if it weathers the incoming storm.

BigBear.ai faces an existential crisis

BigBear.ai, which went public by merging with a special purpose acquisition company (SPAC) in late 2021, originally claimed it could grow its annual revenue from $182 million in 2021 to $550 million in 2024. However, its revenue only reached $146 million in 2021 and $158 million in 2024. Its net loss more than doubled from $124 million in 2021 to $257 million in 2024.

BigBear.ai struggled with macro headwinds, tough competition from larger AI companies, and the bankruptcy of its top customer Virgin Orbit in 2023. It's also on its third CEO since its public debut, and it recently delayed its 10-K filing for 2024 to restate all of its financial statements for 2022 and 2023. That restatement only impacts the calculations for its convertible debt and won't affect its sales or margins, but it still rattled its disillusioned investors.

The bulls hope BigBear.ai's newest CEO, Kevin McAleenan, the acting secretary of the Department of Homeland Security under the first Trump administration, will bring in some fresh government contracts. The company gained some new government contracts over the past year, but it still faces intense competition from larger AI software companies like C3.ai and Palantir.

BigBear.ai already acquired the AI vision company Pangiam a year ago to boost its sales, and it might need to make more acquisitions to expand its fledgling business. However, that could be tough to achieve without severely diluting its existing investors or taking on a lot more debt.

From 2024 to 2026, analysts expect BigBear.ai's revenue to grow at a CAGR of 10% as its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) turn green by the final year. But with a market cap of $820 million, it doesn't look cheap at 4 times next year's sales.

The better buy: Supermicro

Supermicro isn't out of the woods yet, but it's nullified the biggest bearish arguments by resolving its most pressing issues. It also looks cheap relative to its growth potential -- assuming the escalating trade war doesn't spark a full-blown recession.

By comparison, BigBear.ai hasn't proven its business model is sustainable or that it can break out of its tiny niche yet. It also doesn't look like a bargain yet. So for now, Supermicro still seems like a better play on the AI market than BigBear.ai.