NEW YORK, March 5, 2026, 06:10 EST
- Babcock & Wilcox has landed the green light to move forward on a $2.4 billion contract connected to Applied Digital’s AI campuses.
- The SEC filing puts the fixed fee at roughly $434.8 million, with additional variable charges depending on the work done.
- Fourth-quarter revenue came in at $161 million, beating what analysts had expected.
Babcock & Wilcox Enterprises, Inc (NYSE: BW) said it’s moving ahead with a $2.4 billion contract to supply equipment for AI-focused data center campuses backed by Applied Digital. The stock shot up almost 31% early Wednesday, following news that fourth-quarter revenue hit $161.0 million—outpacing the $155.6 million average estimate from analysts, according to LSEG data.
The deal comes as the rush to roll out energy-intensive AI data centers puts electricity supply front and center—not just for utilities. At a White House event on Wednesday, leading tech companies committed to securing dedicated power for their data centers. Jon Gordon, director at Advanced Energy United, pointed out that “paying for the generation doesn’t get it online any faster.” Reuters
NextEra Energy, the country’s biggest electricity provider, told investors Tuesday it’s planning to add between 15 and 30 gigawatts of new generation capacity for U.S. data centers through the next nine years. The company pointed to natural gas as the likely backbone for most of that growth—a signal that suppliers linked to gas-fired projects are experiencing a fresh surge in demand.
B&W has received the green light to begin full-scale work on four 300-megawatt natural gas-fired boilers and steam-turbine generator systems, totaling 1.2 gigawatts. CEO Kenneth Young pointed to “rapidly expanding power needs” from AI data centers driving the project. Applied Digital’s Wes Cummins summed it up as “turning power into operational AI capacity.” Babcock Wilcox
A U.S. securities filing revealed the definitive design-build agreement landed on Feb. 26, replacing the limited notice to proceed B&W had already disclosed. The deal’s total value could hit $2.4 billion, made up of a fixed fee of $434,806,756 and additional variable charges based on work completed, according to the filing.
B&W posted operating income of $12.2 million for the fourth quarter, a jump from $2.6 million in the year-ago period. Adjusted EBITDA from continuing operations hit $16.4 million, a figure that leaves out items like interest and depreciation. For 2025, the company logged $587.7 million in revenue with adjusted EBITDA at $43.7 million. Young cited “strong operating results” and highlighted debt reduction. The backlog, after factoring in the new data-center project, climbed to $2.8 billion. B&W put its pipeline—projects still under discussion—at over $12 billion. The results call is scheduled for March 16 at 5 p.m. ET. Babcock Wilcox
Applied Digital (NASDAQ: APLD) lined up a $2.15 billion offering of 6.750% senior secured notes due 2031, selling them at 98% of face value. The deal is expected to close around March 10. Proceeds are slated for building out 200 megawatts of critical IT load at the Polaris Forge 2 AI Factory campus in Harwood, North Dakota.
Akron-based B&W makes energy and environmental gear for utilities and industrial buyers. With this contract, the company moves further into data-center supply. Siemens Energy will handle both design and supply of the steam turbine generator sets for the job.
A project this big has the potential to drag on results if timelines slip or expenses climb. In its filing, B&W flagged that backlog figures might not reflect future operating numbers and could be changed or canceled outright. The company also cautioned that what’s in the pipeline isn’t guaranteed to convert to revenue as planned — or possibly ever.
Base Electron, a fresh entrant among independent power producers and backed by Applied Digital, has been established to build and operate generation assets both for grid supply and specific contracted clients. For B&W, it’s a full design-build contract—engineering, procurement, and construction all wrapped into a single deal.
