One of the best-performing stocks on Hump Day was from an under-the-radar company that's been plying its trade for almost 160 years. Babcock & Wilcox Enterprises (BW 11.59%), which concentrates on the design and sale of power-generation assets, saw its share price zoom nearly 46% higher that trading session, on news of the start of a new project.
A $2.4 billion win
Before market open that day, Babcock & Wilcox announced it had received a full notice to proceed with a design-build project with power producer Base Electron. The goal of the project, which the company said will earn it $2.4 billion, is to deliver 1.2 gigawatts of new electricity generation capacity for Base Electron's owner, artificial intelligence (AI) data center operator Applied Digital.
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Babcock & Wilcox is the key contractor on this project. It said it will not only design the power plant, but also procure equipment for its operation, and construct the facility.
The company was clearly excited about the project. It quoted CEO Kenneth Young as saying that the work "further underscores the strategic role B&W plays in supporting the rapidly expanding power needs of large‑scale AI data centers."
Additionally, Babcock & Wilcox reported its fourth quarter and full-year results that day. For the quarter, its revenue was down marginally year over year to $161 million. The company narrowed its net loss under generally accepted accounting principles (GAAP) to $3.5 million from the year-ago shortfall of $53.8 million.
NYSE: BW
Key Data Points
The right activity at the right time
It's not only the large scale of the project -- even for a company as well-established as Babcock & Wilcox -- it's also the nature of the work. Data center operators can't build out AI-supporting infrastructure fast enough, so any industrial company successfully involved in the niche is primed to win more such projects. It's little wonder that the company's shares vaulted ahead on the news.
