Babcock Sees Surge in Demand for Power Generation and AI Data Centers

Company lifts 2026 adjusted EBITDA outlook amid rising baseload power and AI data center needs

Mar. 16, 2026 at 10:53pm

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Babcock (NYSE:BW) management reported strong fourth quarter and full year 2025 results, driven by increased demand for baseload power generation and emerging AI data center power needs. The company also lifted its 2026 adjusted EBITDA target range to $80 million to $100 million.

Why it matters

Babcock's improved performance highlights the growing demand for reliable power generation, both from traditional baseload sources like coal as well as new AI-powered data centers. This trend could have broader implications for the energy industry as companies seek to meet rising electricity needs.

The details

Babcock CEO Kenny Young said the company has 'seen significant growth due to higher demand in electrical generation,' with U.S. coal plants operating at less than 50% utilization and 'untapped capacity' now being used as electricity demand rises. The company also cited a $2.4 billion contract with Base Electron to deliver 1.2 GW of electricity for AI data center campuses, which Young described as an 'exciting step forward' for Babcock.

  • Babcock reported its Q4 2025 and full-year 2025 results on March 16, 2026.
  • The $2.4 billion contract with Base Electron is scheduled to commence site work in 2026, with most construction planned for 2027 and 2028.

The players

Babcock & Wilcox Enterprises, Inc.

A specialized provider of energy and environmental technologies and services serving power generation and heavy industrial markets.

Kenny Young

Chairman and CEO of Babcock & Wilcox Enterprises.

Base Electron

An AI data center company that has contracted with Babcock to deliver 1.2 GW of electricity for its AI factory campuses.

Applied Digital

A company that is backstopping the $2.4 billion contract between Babcock and Base Electron with a guarantee of 'full and timely performance' of Base Electron's obligations.

Cameron Frymyer

Chief Financial Officer of Babcock & Wilcox Enterprises.

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What they’re saying

“We must have seen significant growth due to higher demand in electrical generation, and that momentum, combined with recent announcements, led Babcock & Wilcox Enterprises to increase its 2026 adjusted EBITDA target range to $80 million to $100 million.”

— Kenny Young, Chairman and CEO

“The agreement, backed by Applied Digital, is valued at $2.4 billion and is intended to deliver 1.2 GW of electricity 'directly connected to the grid in support of AI factory campuses,' according to management.”

— Kenny Young, Chairman and CEO

What’s next

Babcock expects to provide further announcements and details on additional AI data center opportunities 'in the coming weeks'.

The takeaway

Babcock's strong performance highlights the growing demand for reliable power generation, both from traditional baseload sources like coal as well as new AI-powered data centers. This trend could have broader implications for the energy industry as companies seek to meet rising electricity needs.