Baker Hughes doubles data center order target to $3B on AI demand
Energy infrastructure play surges as artificial intelligence centers drive unprecedented power needs
Baker Hughes shares surged nearly 4% on Monday after the oilfield services company doubled its three-year order target for data center infrastructure to $3 billion, capitalizing on the explosive growth in artificial intelligence power requirements.
The Houston-based energy technology company, which has been pivoting its portfolio toward energy transition and industrial markets, told investors during its fourth-quarter 2025 earnings presentation that accelerating demand from AI data centers has outpaced initial expectations. The revised $3 billion target represents a 100% increase from the previous $1.5 billion goal, with the Industrial & Energy Technology (IET) segment expected to be the primary beneficiary.
The stock climbed 4.03% to $55.97 on heavy volume of approximately 15 million shares, well above its average daily trading range of 8-9 million shares. The move pushed the stock near its 52-week high of $55.31 and marked one of the strongest performances in the energy equipment sector.
Baker Hughes' strategy centers on its NovaLT gas turbines, which the company is positioning as a critical power solution for data centers requiring reliable, large-scale electricity generation. The turbines feature "molecule-agnostic" capabilities, able to operate on natural gas, hydrogen blends, or 100% hydrogen, providing operators flexibility as decarbonization pressures intensify.
The announcement reflects a broader trend in which traditional energy companies are finding unexpected growth opportunities in the technology sector. AI data centers are projected to consume up to 12% of total U.S. electricity by 2028, according to the International Energy Agency, with global data center electricity consumption expected to double by 2030 to approximately 945 terawatt-hours.
"We're seeing a fundamental shift in how data centers think about power," said analysts following the company. "Hyperscalers can no longer rely solely on grid capacity and are looking for on-site, reliable generation that can scale with their AI workloads."
Baker Hughes has already secured significant contracts in this space. In March 2025, the company announced an award from TURBINE-X Energy Inc to provide NovaLT turbine technology for multiple North American data center projects. This was followed in May 2025 by an agreement with Frontier Infrastructure Holdings for 16 turbines capable of delivering up to 270 megawatts of power for data centers in Wyoming and Texas.
The momentum extends beyond individual contracts. In the second quarter of 2025 alone, Baker Hughes secured over $550 million in data center-related orders, booking solutions for 1.2 gigawatts of power. The company expects its IET orders to exceed $40 billion over the 2026-2028 period, with data centers representing a significant and growing portion of that total.
Analysts have taken notice of the strategic pivot. Baker Hughes currently carries a consensus "Buy" rating from analysts, with an average 12-month price target of $53.47, according to market data. Some analysts have raised targets as high as $65 for year-end 2026, reflecting confidence in the data center opportunity and broader energy transition trends.
The company's traditional oilfield services business continues to face headwinds, with quarterly earnings growth declining 20.8% year-over-year and revenue growth slowing to 1.5%. However, the diversification into power systems and industrial technology is helping offset traditional cyclical pressures in the energy sector.
Baker Hughes' market capitalization stands at approximately $53.2 billion, with the stock trading at 18.6 times trailing earnings and 19.96 times forward earnings. The company pays a dividend of $0.90 per share, yielding 1.65% at current levels.
The data center opportunity represents a convergence of multiple trends: the exponential growth of AI computing, concerns about grid reliability and capacity, and increasing pressure on technology companies to reduce carbon emissions. Gas turbines, particularly those capable of running on hydrogen blends, offer a pathway to reliable power that can scale quickly while providing a clearer route to decarbonization than diesel generators.
"The AI boom is creating an energy infrastructure crisis that companies like Baker Hughes are uniquely positioned to solve," noted energy sector analysts. "This isn't just about providing backup power anymore—it's about becoming integral infrastructure for the digital economy."
Looking ahead, investors will be watching for execution on the $3 billion order target and whether Baker Hughes can convert the opportunity into sustainable revenue growth. The company's ability to scale production of NovaLT turbines and expand its power systems portfolio will be critical metrics in coming quarters.
With artificial intelligence showing no signs of slowing and data center construction accelerating globally, the demand for reliable, scalable power solutions is expected to remain robust. For Baker Hughes, the question is whether it can capture enough of this market to meaningfully offset challenges in its traditional oil and gas businesses and justify current valuation levels.