Babcock & Wilcox Rockets On $2.4 Billion AI Data Center Project, Reports Q4 Results
Babcock & Wilcox Enterprises Inc. (NYSE:BW) shares skyrocketed on Wednesday after the company said it received full notice to proceed on a $2.4 billion design-build agreement with Base Electron to deliver 1.2 gigawatts of new power generation capacity.
The generation will support Applied Digital Corp’s (NASDAQ:APLD) AI Factory campuses under separate power supply agreements.
$2.4 Billion Project To Power AI Data Centers
The project includes four 300-megawatt natural gas-fired boilers and steam turbine generator systems designed to supply power to high-density AI data centers.
Base Electron, an independent power producer backed by Applied Digital, is developing generation assets that provide new dispatchable capacity to the grid and contracted customers.
Under the agreement, Babcock & Wilcox will handle engineering, procurement, and construction of the facility, with engineering and manufacturing already underway.
Siemens Energy AG (OTC:SMEGF) will design and supply the steam turbine generator sets.
Management Commentary
“Receiving full notice to proceed for this $2.4 billion project further underscores the strategic role B&W plays in supporting the rapidly expanding power needs of large‑scale AI data centers,” stated Kenneth Young, B&W Chairman and Chief Executive Officer.
“Our natural gas-fired boilers and related technologies – as well as steam turbines supplied through an agreement with Siemens Energy – provide the reliable, high‑capacity energy generation on a schedule that is required for the grid today,” Young added.
Applied Digital Chairman and CEO Wes Cummins stated, “This project represents to us a critical step in turning power into operational AI capacity.”
Base Electron will support the company’s “long-term campus strategy” and its “disciplined approach to scaling AI infrastructure,” he added.
Cummins added that Applied Digital is evaluating an option with Base Electron for another 1.2 gigawatts of generation capacity.
Siemens Energy will supply steam turbine generator technology designed to deliver long-term performance and reliability.
Financial Performance Overview
Babcock & Wilcox also reported its fourth-quarter 2025 financial results. Revenue totaled $161.0 million, missing the $173.87 million estimate and remaining flat year over year. The company reported a loss of 5 cents per share, compared with the consensus estimate of break-even.
Despite the miss, operating income rose to $12.2 million from $2.6 million a year earlier, while adjusted EBITDA increased 53% to $16.4 million.
The company said results were supported by a 17% increase in parts and services revenue, driven by stronger coal generation usage and higher baseload demand in North America.
Babcock & Wilcox also strengthened its balance sheet by paying off bonds due in February 2026. The company ended the year with net debt of $119.7 million.
Meanwhile, its global project pipeline now exceeds $12 billion, with a continuing operations backlog of $2.8 billion, including the $2.4 billion AI data center project.
Technical Analysis
Over the past 12 months, Babcock & Wilcox has seen an impressive 970% increase in stock price. Currently, the stock is trading 15.4% above its 20-day SMA and a substantial 157.1% above its 200-day SMA, indicating strong bullish momentum in the longer term.
The stock’s price of $9.83 is also significantly higher than its 52-week low of 22 cents, though it has yet to breach the 52-week high of $11.57.
In technical indicators, the RSI stands at 40.89, suggesting neutral market sentiment, while the MACD indicates bearish signals, with the MACD line 20 cents below the signal line. These mixed signals suggest cautious optimism could be warranted.
Benzinga Edge Rankings
Below is the Benzinga Edge scorecard for Babcock & Wilcox Enterprises, highlighting its strengths and weaknesses compared to the broader market:
- Value: Weak (Score: 11.69) — Trading at a steep premium relative to peers.
- Momentum: Bullish (Score: 99.63/100) — Stock is outperforming the broader market.
The Verdict: Babcock & Wilcox Enterprises' Benzinga Edge signal shows mixed signals, with strong momentum but a low value score suggesting caution
BW Price Action: Babcock & Wilcox shares were up 25.59 at $10.16 at the time of publication on Wednesday, according to Benzinga Pro data.
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