When investors think of the giants of artificial intelligence, Magnificent Seven stocks like Nvidia (NVDA), Microsoft (MSFT) and Alphabet (GOOGL) or maybe Palantir Technologies (PLTR) come to mind. But defense, intelligence and civil management consultant Booz Allen Hamilton (BAH) wears the crown as the largest provider of AI to the federal government.

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While Nvidia, Meta, Microsoft, Google and Palantir all made the latest list of new buys by the best mutual funds, Booz Allen Hamilton also secured a spot on the list.

Boosted by strong institutional demand and an A- Accumulation/Distribution Rating, BAH stock has now crafted a flat base with a 150.59 buy point. A breakout would propel the stock an all-time high.

Virginia-based Booz Allen Hamilton earns a 94 Composite Rating. The rating shows it is outpacing 94% of all stocks in terms of key stock-picking factors.

Booz Allen Hamilton Drives AI In Government

Across its three major business segments — defense, civil government and intelligence — Booz Allen Hamilton is leading the AI push throughout the federal government. Last year, the firm was recognized as the largest provider of AI-related services to the federal government by researcher GovWin from Deltek.

Booz Allen Hamilton works with the Defense Department to try and get ahead of adversaries in the global AI race. Collaborating with the Pentagon, it is working to integrate AI into all aspects of missions and operations. That includes training an AI-ready workforce and defining and building the related infrastructure.

In the civil government space, Booz Allen’s work spans energy and the environment, financial services, health, homeland security, law enforcement, and transportation. The company deploys cognitive search algorithms and develops models to predict global health threats. It also leverages computer vision to identify suspicious packages.

In the intelligence arena, Booz Allen Hamiltion works across the federal government to harness AI to support intelligence analysts and improve decision-making.

Earnings Pop

On Jan. 26, Booz Allen Hamilton posted an earnings surprise, topping forecasts for the third quarter of fiscal 2024, which ended Dec. 31. The company generated earnings of $1.41 per share, a 32% year-over-year gain. Sales rose 13% to roughly $2.57 billion.

On May 24, the consulting firm is set to report results for the fiscal fourth quarter that ended March 31. Analyst estimates call for a 22% rise to $1.23 a share.

Booz Allen Hamilton sports an SMR Rating of A. The rating tracks sales growth, profit margins and return on equity. But the company does carry a heavy debt-to-equity ratio of 279%.

AI Stocks BAH, NVDA Craft Buy Points

Among other AI players, Google stock remains extended from a breakout last month. Further, Nvidia keeps its base and 974 buy point intact but dropped below its 50-day moving average in Wednesday. Microsoft’s flat base also remains intact, but selling pressure has dragged the stock below its 50-day benchmark.

Fellow AI stock Palantir has gone on a rocky ride since clearing a 21.85 buy point out in February. On Wednesday, PLTR stock held support at its earlier buy point, but remains trapped below its 50-day line.

Meanwhile, Booz Allen Hamilton stands strong in an early stage flat base showing a 150.59 buy point.

BAH stock gapped up in heavy volume on its Jan. 26 earnings report. Since then, it has moved mostly sideways, refusing to fill the gap — a sign of strength.

Another promising sign in this troubled market is the upward trending relative strength line, which continues to close in on a 52-week high.

Follow Matthew Galgani on Twitter at @IBD_MGalgani.

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