BW

Babcock & Wilcox builds the equipment that turns natural gas into electricity at power plants. The company manufactures heat recovery steam generators (HRSGs), industrial boilers, and environmental control systems — the physical hardware that captures heat from gas combustion and converts it into steam to spin turbine generators. For most of its 150+ year history, BW served coal-fired utilities and industrial customers. The company nearly went under — stock fell to $0.22 in 2022 — before a restructuring stabilized operations.

The transformation arrived in November 2025 when BW signed a limited notice to proceed with Base Electron, an independent power producer backed by Applied Digital, to design and install 1.0 GW (later expanded to 1.2 GW) of natural gas-fired power generation for Applied Digital's AI Factory campuses. The full notice to proceed came March 4, 2026, converting this into a firm $2.4B design-build contract — four 300 MW facilities using proven boiler and steam turbine generator technology. This single contract is more than 4× BW's annual revenue.

The company operates through three segments: BW Thermal (boilers, HRSGs — the core), BW Environmental (emissions control, scrubbers), and BW Renewable (biomass, waste-to-energy). FY2025 revenue was $587.7M with adjusted EBITDA of $43.7M — a 107% improvement but the company remains unprofitable on a GAAP basis. Net debt was $119.7M at year-end 2025. The global pipeline now exceeds $12B, driven by data center power demand.

The thesis is simple and binary: BW is a sub-scale industrial company that landed a contract large enough to change its trajectory. If they execute the Applied Digital build on time and within margin, they become a credible data center power EPC contractor with a proven reference. If they stumble — cost overruns, delays, quality issues — the stock reverses hard.