BigBear.ai (NYSE:BBAI) tumbled 8% during Wednesday afternoon trading after its third quarter 2024 financial results failed to meet market expectations.

However, the analysts at Cantor Fitzgerald noted steady improvement by the artificial intelligence-powered solutions company.

"BigBear.ai delivered a solid start to 2H24 on 22.1% y/y growth in 3Q24 revenue to $41.5M," said Cantor Fitzgerald analysts Jonathan Ruykhaver and Ben Mitchell, in a Wednesday note. "Further, the ending backlog of $437M represents 156.7% y/y growth driven by several new government contracts. Positive adjusted EBITDA demonstrates the firm's commitment to improving margins. Overall, the quarter demonstrated solid progress on key initiatives, including ConductorOS development and Pangiam integration."

BigBear.ai expects middleware technology such as ConductorOS to enjoy high demand as enterprises continue to adopt AI tools.

As a result, Cantor Fitzgerald initiated an Overweight rating on the stock and set a 12-month price target of $3.50.

However, Seeking Alpha analyst Michael Wiggins De Oliveira recommended a Sell on the stock following the latest earnings results.

"As an Inflection investor, you should always pay attention to a company's balance sheet," he said in an analysis on Wednesday. "On this front, BigBear.ai scores poorly. More specifically, BigBear.ai has a net debt position of approximately $130M. This means that nearly 30% of its market cap is made up of debt."

Other modest-sized AI companies were up on Wednesday. C3.ai (NYSE:AI) had jumped 5% by early afternoon trading, while SoundHound AI (NASDAQ:SOUN) was up 4%.