SAIC · Science Applications International Corporation

Information Technology Services · mkt cap $4.8B · calls: Q1 FY2027 vs Q4 FY2026

30.0 conviction · conf-adj 30

conf – 🚀 reported

enthusiasm:21.0 · trend:8 · quantifies:0 · impact:0 · under_radar:5 · credibility:0 · business_impact:4 · disruption:-14 · commitment:0 · confirmation:6

Enthusiasm latest 7 / prev 6 (rising)

SAIC frames AI as mission integration—multimodal models, legacy-code modernization, tasking, human-machine teaming, data fusion, cyber, and classified-network enablement via SilverEdge—not as a standalone product line. Messaging grew more concrete from Q4 pilots/agents and SilverEdge leverage to Q1’s operational use-case list plus autonomous-systems and data-layer positioning, but management never ties AI to revenue, bookings, margin, or productivity numbers, and no analyst pressed the topic. Credibility rests on specific application areas and the ~$200M SilverEdge acquisition narrative, not measurable AI business impact.

PAST (realized)

In recent years, we have helped defense, intelligence, and civilian agencies establish data and knowledge standards and develop multimodal AI, and build secure data layers that underpin some of the nation's most sensitive missions.
We think that the things that we have acquired from them on the intellectual property side as well as some of the capabilities that we have to serve our intelligence customers with AI enablement in classified networks is something that we think is extensible beyond the customers that they brought with them, and we are working to leverage that.
SilverEdge is a classic example of investing a couple hundred million off our balance sheet to be able to fund, to bring some real new capabilities into the organization.

CURRENT (now)

Today, we are applying AI to modernize legacy code, generate operational tasking orders, enhance human machine teaming, strengthen data fusion, and harden cyber defenses.
Looking ahead, we are collaborating with clients to pilot and implement AI-powered agents to stabilize and secure critical networks.
And then also our intimate knowledge with how the-- how the customer operates give us the opportunities we are executing on now around data fusion, data integration, battle space management, the acceleration of decision making, in areas of I would say, battle space execution.
And given all the software chops, we bring and given the infusion of AI into the software, we are actually moving a little more quickly and it has given us a real opportunity to differentiate ourselves.
This includes advancing next generation command and control capabilities to enable faster, data-driven, multi-domain decision-making modernizing legacy radar capabilities to support evolving needs and expanding our work with loitering munitions and other autonomous systems by establishing domestic production lines to broaden industrial base capacity.
And again, very opportunistic, and I would say we are continuing to actively invest inside the company around digital infrastructure, and, obviously, the AI related investments we are making inside of the company.

FORWARD (guidance)

The opportunity ahead is not about delivering an AI product. it is about how quickly we can integrate and operationalize these capabilities in real world missions.
But at the end of the day, it comes down to our ability to put up continued performance as AI adoption increases.
The speed of these innovations is essential for helping our customers address the evolving threat landscape and meet affordability objectives.
Technology into some extent AI, can be deflationary. So what we have to do is as we have done over multiple decades, is ensure that we can do more with less using technology to drive our performance.
I think we want to be at the intersection where you know, the systems are converging. And, you know, legacy distinctions between title 10 title 50, title 18, they are all starting to merge, and to be operating in the data layer where the data is not owned by individual companies, but it is fully democratized so we can bring the best of the tools that are available to get the most out of the architectures in place as well as the data that is being generated.
especially with the threats posed by AI, to have the right architectures in place and the right of, I am gonna say, cyber hygiene.

TRACK RECORD — PROMISE vs DELIVERY

—/100 (no quantified promises) no-quantified-promises 6 calls reviewed

Across six SAIC earnings calls (Q4 FY2025–Q1 FY2027), management cites AI/ML deployments (e.g., CBP biometrics to 5,000+ agents, 700 LPR systems), SilverEdge acquisition, and internal AI efficiency ambitions, but never sets quantified AI targets with numbers and deadlines. Without measurable AI promises, delivery credibility cannot be scored.

PRICED-IN (REFINED)

MEDIUM

Est. revisions flat · Fwd P/E 19.8 · EV/Sales 0.7x

AI claim maps to Defense And Intelligence

Analyst ratings are unchanged (2 buy / 7–8 hold / 1 sell) and near-term price targets are flat at $116 versus $116 last quarter, though targets are up from $108.44 a year ago. Forward EPS consensus already embeds strong growth (5.60 to 8.76 to 10.09) while revenue estimates are roughly flat to down, so some efficiency upside may be in numbers without active revision momentum. Valuation is not stretched (fwd P/E ~19.8, EV/Sales ~0.7x, EV/EBITDA ~6.7x), which offsets partial bake-in and supports a mixed verdict rather than high priced-in.

COVERAGE — ENTHUSIASM TRAJECTORY + CATALYSTS

5Q4 FY20253Q1 FY20264Q2 FY20266Q3 FY20266Q4 FY20268Q1 FY2027

AI enthusiasm across 6 calls — trend ↗ rising

From isolated customer ML examples to SilverEdge acquisition and mission-integration AI with concrete operational use cases.

RECENT AI CATALYSTS & NEWS

BUSINESS IMPACT - QUALITATIVE MATERIALITY

5/10 qualitative impact moderate medium-term · soft evidence

Where AI matters: classified mission AI integration & federal services delivery

SAIC cites real mission use cases (legacy modernization, tasking, data fusion, cyber, SilverEdge on classified networks) and pilots, but ties no AI metrics to revenue, bookings, or margin—upside is differentiation and contract capture, not a measurable P&L driver yet.

Caveats: No disclosed AI revenue/bookings/margin—upside may stay narrative; Gov procurement and classified constraints slow commoditization but also slow AI monetization; SilverEdge and agent pilots may not offset pricing/FTE pressure on commodity IT work

AI DISRUPTION / CANNIBALIZATION RISK headwind · 6/10

Cost-plus/T&M and labor-heavy integration remain the economic core; management admits AI is deflationary and must 'do more with less,' so GenAI compresses billable software/sustainment hours faster than unquantified mission-AI wins expand revenue, despite clearance and mission-integration moats.

OPTIONS / MARKET STRUCTURE

option liquidity: fair

ATM IV

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TYPICAL BID-ASK

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OPEN INTEREST

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proxy inputs — dollar-ADV $66M · beta 0.27 · px $110.89

source: proxy (no options chain on FMP)
FMP /stable/ exposes no options-chain endpoint on this key, so ATM IV, bid-ask spread and open interest are unavailable. Liquidity below is a PROXY from dollar-ADV, beta and price level (a stand-in for option depth), not measured option-market data.

CONFIRMATION — INSIDERS · 13F · LANGUAGE

Confirming — insiders buying, institutions adding, management language 5/10 measured.

INSIDERS buying 6 open-market buy(s) vs 0 sell(s) — net accumulation

INSTITUTIONS (13F) adding as of 2026-03-31: 75 new / 59 closed positions; 230 increased / 119 reduced; institutional ownership +0.17pp; +15 net 13F holders

MGMT LANGUAGE 5/10 measured One brief AI block: firm present-tense use cases, no revenue or rollout metrics, heavy qualification.

commit “Today, we are applying AI to modernize legacy code, generate operational tasking orders, enhance human machine teaming, strengthen data fusion, and harden cyber defenses.”

commit “In recent years, we have helped defense, intelligence, and civilian agencies establish data and knowledge standards and develop multimodal AI”

commit “it is about how quickly we can integrate and operationalize these capabilities in real world missions”

VERBATIM AI QUOTES

“In recent years, we have helped defense, intelligence, and civilian agencies establish data and knowledge standards and develop multimodal AI, and build secure data layers that underpin some of the nation's most sensitive missions.”
— Prabu Natarajan, Q1 FY2027

“Today, we are applying AI to modernize legacy code, generate operational tasking orders, enhance human machine teaming, strengthen data fusion, and harden cyber defenses.”
— Prabu Natarajan, Q1 FY2027

“The opportunity ahead is not about delivering an AI product. it is about how quickly we can integrate and operationalize these capabilities in real world missions.”
— Prabu Natarajan, Q1 FY2027

“But at the end of the day, it comes down to our ability to put up continued performance as AI adoption increases.”
— Prabu Natarajan, Q1 FY2027

“This includes advancing next generation command and control capabilities to enable faster, data-driven, multi-domain decision-making modernizing legacy radar capabilities to support evolving needs and expanding our work with loitering munitions and other autonomous systems by establishing domestic production lines to broaden industrial base capacity.”
— James C. Reagan, Q1 FY2027

“And again, very opportunistic, and I would say we are continuing to actively invest inside the company around digital infrastructure, and, obviously, the AI related investments we are making inside of the company.”
— Prabu Natarajan, Q1 FY2027

“And given all the software chops, we bring and given the infusion of AI into the software, we are actually moving a little more quickly and it has given us a real opportunity to differentiate ourselves.”
— Prabu Natarajan, Q1 FY2027

“And then also our intimate knowledge with how the-- how the customer operates give us the opportunities we are executing on now around data fusion, data integration, battle space management, the acceleration of decision making, in areas of I would say, battle space execution.”
— James C. Reagan, Q1 FY2027

“Technology into some extent AI, can be deflationary. So what we have to do is as we have done over multiple decades, is ensure that we can do more with less using technology to drive our performance.”
— Prabu Natarajan, Q1 FY2027

“I think the other thing that, Jim was alluding to is just as important. I think we want to be at the intersection where you know, the systems are converging. And, you know, legacy distinctions between title 10 title 50, title 18, they are all starting to merge, and to be operating in the data layer where the data is not owned by individual companies, but it is fully democratized so we can bring the best of the tools that are available to get the most out of the architectures in place as well as the data that is being generated.”
— Prabu Natarajan, Q1 FY2027

“But I do think that these critical systems, this critical infrastructure has to be maintained has to be robust, and, you know, especially with the threats posed by AI, to have the right architectures in place and the right of, I am gonna say, cyber hygiene.”
— Prabu Natarajan, Q1 FY2027

“Looking ahead, we are collaborating with clients to pilot and implement AI-powered agents to stabilize and secure critical networks.”
— Jim Reagan, Q4 FY2026

“The speed of these innovations is essential for helping our customers address the evolving threat landscape and meet affordability objectives.”
— Jim Reagan, Q4 FY2026

“I think that the next thing is to start moving into some pretty hard focus on realizing the benefits of the business model we acquired with SilverEdge. We think that the things that we have acquired from them on the intellectual property side as well as some of the capabilities that we have to serve our intelligence customers with AI enablement in classified networks is something that we think is extensible beyond the customers that they brought with them, and we are working to leverage that.”
— Jim Reagan, Q4 FY2026

“We are also investing—SilverEdge is a classic example of investing a couple hundred million off our balance sheet to be able to fund, to bring some real new capabilities into the organization.”
— Prabu Natarajan, Q4 FY2026

“And finally, but certainly not the least important of which, is we are actively building capabilities, whether that is mission labs, or our Mission Data Platform, or our classified.”
— Prabu Natarajan, Q4 FY2026