← back to rankingBKR · Baker Hughes Company
Oil & Gas Equipment & Services · mkt cap $64.0B · calls: Q1 FY2026 vs Q4 FY2025
28.0 conviction · conf-adj 28
conf 6/10 partial
enthusiasm:18.0 · trend:-5 · quantifies:0 · impact:0 · under_radar:0 · credibility:12 · business_impact:4 · disruption:0 · commitment:-4 · confirmation:3
Enthusiasm latest 6 / prev 8 (falling)
Baker Hughes frames AI primarily as a demand driver for power equipment and digital lifecycle services—not as an internal productivity engine. The credible, quantified thesis is indirect: AI/data-center build-out pulls NovaLT turbines, BRUSH generators, Cordant/iCenter monitoring, and new Google Cloud AI-enabled power optimization for data centers, with $3B of data-center orders targeted for 2025–2027 and Cordant/Leucipa already booking. Enthusiasm is substantive but moderated in Q1: less macro AI narrative than Q4, though the Google partnership adds a product-layer AI angle beyond selling hardware into AI load growth.
GROUNDED NEXT-FY IMPACT vs CONSENSUS
Grounded on actual base — revenue $27.7B · net income $2.6B · net margin 9.3% · diluted EPS 2.6
These are next-fiscal-year annual uplift estimates, not next-quarter numbers.
Aggregate next-FY est. rev uplift: % · next-FY EPS uplift: % · vs analysts: ahead · priced in: high (model's call-read: low; verdict above is the hard-data one used for ranking) · confidence: 6/10
| Claim | Figure | Arithmetic | Next-FY Rev % | Next-FY EPS % |
|---|
Data center-related IET orders ~$3B (2025-2027)
revenue | approximately $3 billion (2025-2027) | Bookings, not FY revenue. $3B ÷ 3 yr = $1.0B/yr orders; assume ~35% converts to FY2026 revenue → $350M. rev_uplift_pct = 100 × 350M / 27,733M = 1.262%. incremental_net_income = 350M × 9.3318% net margin = $32.66M; eps_uplift_pct = 100 × 32.66M / 2,588M = 1.262%. Selling power into the AI/data-center buildout = supplier-side. | 1.262 | 1.262 |
$1B data-center orders within $2.5B power-systems orders (2025)
revenue | $1 billion of $2.5 billion (2025) | 2025 bookings; next-FY (FY2026) recognition only. Assume ~40% of $1.0B DC bookings → $400M FY2026 revenue. rev_uplift_pct = 100 × 400M / 27,733M = 1.4423%. @9.3318% incr margin → $37.33M NI; eps_uplift_pct = 1.4423%. Component of the $3B trajectory, not additive. | 1.4423 | 1.4423 |
Power Systems orders $1.4B incl. data-center generation (Q1 FY2026)
revenue | $1.4 billion (Q1 FY2026) | Q1 FY2026 integrated power-gen booking (NovaLT16 + BRUSH, ~1GW). Multi-year delivery; assume ~30% recognized in FY2026 → $420M. rev_uplift_pct = 100 × 420M / 27,733M = 1.5144%. @9.3318% margin → $39.19M NI; eps_uplift_pct = 1.5144%. Overlaps DC order pool — not additive at aggregate. | 1.5144 | 1.5144 |
1.21 GW data-center generator capacity (Boom award)
other · soft | 1.21 gigawatts | GW capacity only; no $ revenue or $/GW base anywhere in inputs — cannot convert without inventing a price. Unanchored. | | |
NovaLT orders ~2 GW (2025)
other · soft | approximately 2 gigawatts | Order volume in GW across oil&gas/industrial/data center; no $ figure, no order split, only partly AI-related. Unanchored. | | |
Cordant software orders +20% (2025)
revenue · soft | 20% increase in software orders | Cordant is BKR's own AI asset-performance software (adopter-side). % growth with no Cordant order/revenue base disclosed anywhere in inputs — cannot size dollar uplift. Directionally positive, higher-margin, but unanchored. | | |
Cordant power-related orders doubled YoY (Q1 FY2026)
revenue · soft | doubled YoY (after +80% in 2025) | Same own-product digital software (adopter). Growth rate only; prior-period $ base not disclosed. Unanchored. | | |
Leucipa deployed across ~75,000 wells
engagement · soft | approximately 75,000 wells | BKR's own AI production-optimization software (adopter). Install-base count only — no revenue-per-well or attach $ in inputs. Unanchored. | | |
Leucipa/ESP awards >1,000 wells (KOC, PDO 2025)
engagement · soft | over 1,000 wells | Well count for Middle East awards; no contract $ disclosed. Adopter, unanchored. | | |
AI infrastructure spending $500B (2025) → ~$1T late 2020s
other · soft | $500B / ~$1T industry TAM | Industry-wide TAM cited by management, not BKR revenue. No mapping to BKR share. Context only. | | |
Data-center power demand 12% CAGR through 2040
other · soft | 12% CAGR | Third-party industry growth rate; not a BKR revenue figure. Context only. | | |
Behind-the-meter market $60B by 2030
other · soft | $60 billion by 2030 | TAM, not BKR revenue or share. Context only. | | |
Power-systems annual market opportunity >$100B by 2030
other · soft | more than $100 billion by 2030 | TAM, not BKR revenue or share. Context only. | | |
Cordant higher-margin backlog / operating leverage entering 2026
other · soft | higher-margin backlog; 'quite a bit of operating leverage' | Qualitative margin/mix claim with no quantified margin, backlog $, or opex saving. Vague ('quite a bit') — cannot size. Unanchored. | | |
Assumptions: Earnings base: FY2025 net income $2,588M / 994M sh, net margin 9.3318% (2588/27733); consensus adjusted EPS (~$2.42–2.46) close to reported, so the NI base is usable. Incremental margin = current 9.3318% net margin (equipment/power-systems orders, not higher-margin software; the Cordant/software claims that would justify a richer margin are themselves unquantified). Tax 21% default not applied (no quantified cost saves). Bookings≠revenue throughout: $3B DC pipeline at ~35% in-year FY2026 recognition → $350M; 2025 $1B DC bookings at ~40% → $400M; $1.4B Q1 award at ~30% → $420M. Claims 1-3 OVERLAP (same DC order pool), NOT summed; deduped FY2026 supplier recognition ≈ $650M (haircut for $1.4B award overlap with annual DC flow). Next fiscal year = FY2026 ending 2026-12-31.
Top line: Quantified management claims are overwhelmingly supplier-side (turbines, power systems, DC bookings). Standalone next-FY revenue uplifts: $350M (1.26%), $400M (1.44%), $420M (1.51%) — sum $1.17B (4.22%) before overlap. Deduped FY2026 supplier revenue recognition ≈ $650M → 2.34% of $27.733B base. Adopter-side engagement (Cordant, Leucipa wells) has no $ anchor. Industry TAMs ($60B, $100B, $500B–$1T) are not BKR revenue.
Bottom line: At company net margin 9.3318%, deduped $650M supplier revenue → ~$60.7M incremental net income → ~2.34% EPS uplift vs $2.588B NI (≈$0.06/share on 994M shares). Cordant margin/operating-leverage claim is adopter-oriented but unquantified (null). No quantified cost/productivity saves.
[sized AI revenue is supplier-side (selling into the buildout), not adopter — uplift n/m] BKR's quantified AI exposure is real but supplier-side and bookings-based: a ~$3B 2025-27 data-center IET order pipeline plus 2025/Q1 power-systems awards that, after conservative in-year conversion haircuts and overlap dedup, contribute ~$650M (~2.3%) of FY2026 revenue and ~2.3% to EPS. The adopter-side own-software story (Cordant, Leucipa) is directionally strong and higher-margin but entirely unanchored in the disclosed inputs, so it is left null rather than invented. Net: modestly ahead of consensus, with limited current pricing-in given most impact sits in multi-year backlog.
MODEL CONSENSUS (impact)
partial
Adopted Y's conservative booking-conversion math and supplier_rev_uplift 2.34%, plus X's correct adopter tagging of Cordant. All soft/TAM claims agreed; aggregate EPS/rev nulls kept.
Conflicts reconciled
- math[1-3] conversion: X=full ~$1B run-rate (3.6% each) vs Y=explicit haircuts (1.262/1.4423/1.5144) -> used Y because applying a booking-to-revenue conversion better honors the bookings≠revenue / next-FY-portion-only rule; X recognizes ~100% of annual orders as revenue, which is aggressive
- Cordant side: X=adopter vs Y=supplier -> used adopter because Cordant is BKR's own AI software
| Field | Opus 4.8 | GPT-5.5 |
|---|
| Rev uplift % | – | – |
| EPS uplift % | – | – |
| Priced in | high | – |
| vs analysts | inline | – |
| Confidence | 6 | – |
| Top line | Baker Hughes' QUANTIFIED AI exposure is overwhelmingly SUPPLIER-side — selling gas turbines, generators and power systems INTO the data-center/AI buildout. The only hard dollars are bookings: ~$3B data-center IET orders across 2025-2027 (~$1B/yr), $1B of 2025 power-systems orders, and $1.4B Q1-FY26 power orders — these overlap into one ~$1B/yr data-center order pool. Converting at a multi-year delivery cadence, ~$1B reaches 2026 revenue = $1.0B/$27.733B ≈ 3.6% supplier-side topline. The ADOPTER-side story (Cordant AI software orders +20% / power orders doubled; Leucipa across ~75,000 wells) is real and strategically positive but carries NO disclosed dollar base — every adopter figure is a growth rate or a unit count, so the adopter headline rev uplift is unquantifiable (null), not zero. | – |
| Bottom line | Flowing the ~$1B 2026 data-center revenue at the current 9.33% net margin gives ~$93M incremental net income = $93M/$2,588M ≈ 3.6% EPS — but that is SUPPLIER-side and excluded from the adopter headline. The genuinely AI-adopter levers (Cordant 'higher-margin backlog' and 'quite a bit of operating leverage', Leucipa differentiation) are exactly the items management left unquantified, so no defensible adopter EPS figure can be struck — est_eps_uplift_pct = null. Net margin is ~9%, not thin enough to distort, so the EPS% would not be an artifact; the constraint is missing dollar bases, not the denominator. | – |
| Reasoning | Consensus already embeds the supplier ramp: 2026 revenue $27,556M is +0.5% vs 2025, then 2027 steps up to $29,712M (+7.8%) and EPS jumps from $2.39 to $2.86 (+19.7%) — precisely the back-end-loaded shape you'd expect as the $3B of 2025-2027 data-center turbine orders convert to revenue with a multi-year lag. The ~3.6% supplier uplift I derive is comfortably inside that 2027 +7.8% consensus step, so it is largely priced in. The adopter-side digital (Cordant/Leucipa) could be upside consensus isn't separately modeling, but with no disclosed dollar base it cannot be shown to push above the consensus trajectory — so no 'interesting' unpriced adopter gap can be established. | – |
Rows highlighted where the two models disagreed.
QUANTIFICATIONS
Data center-related IET orders: approximately $3 billion (2025–2027, topline)
“Against this backdrop, we now expect to book approximately $3 billion of data center-related orders between 2025 and 2027.”
Power systems orders tied to data centers: $1 billion of $2.5 billion (2025, topline)
“In power systems, orders increased significantly to $2.5 billion in 2025, including $1 billion tied to data center applications, reflecting accelerating demand and growing customer confidence in our solutions.”
Power Systems orders (includes data center generation awards): $1.4 billion (Q1 FY2026, topline)
“For power generation, we converted a prior slot reservation agreement into an integrated solution award for a critical infrastructure project in North America. This contract includes NovaLT16 gas turbines, BRUSH Power Generation electric generators, gears and long-term aftermarket services, delivering up to 1 gigawatt of reliable power to support growing energy demand from data centers.”
Data center generator capacity (Boom contract): 1.21 gigawatts (Q1 FY2026 award, topline)
“When paired with Boom's gas turbines, this is expected to deliver a total of 1.21 gigawatts of generator capacity for data centers.”
NovaLT orders: approximately 2 gigawatts (2025, topline)
“2025 marked a milestone year for our NovaLT industrial gas turbines, booking approximately 2 gigawatts of orders across oil and gas, industrial and data center markets.”
Cordant software orders growth: 20% increase (2025, topline)
“IET's Cordant solutions sustained robust momentum in 2025, achieving double-digit order growth for the third consecutive year and a 20% increase in software orders.”
Cordant power-related orders: doubled year-over-year (Q1 FY2026 vs prior year, topline)
“Notably, Cordant’s power-related orders doubled year-over-year, continuing strong momentum from 2025 when power orders rose by more than 80%.”
Leucipa well deployments: approximately 75,000 wells globally (current, topline)
“Currently, this technology is actively deployed across approximately 75,000 wells globally, providing digital enablement that significantly differentiates our artificial lift portfolio through improved surveillance, optimization and production performance.”
Leucipa well deployments (Middle East contracts): over 1,000 wells (2025 awards, topline)
“The awards with KOC and PDO cover the deployment of advanced ESP systems and Leucipa in over 1,000 wells.”
AI infrastructure spending (industry): more than $500 billion in 2025; approaching $1 trillion annually in the late 2020s (2025 and late 2020s, topline)
“Industry estimates suggest that AI infrastructure spending totaled more than $500 billion in 2025 and is expected to approach $1 trillion annually in the late 2020s.”
Data center power demand CAGR (industry estimate cited by mgmt): 12% (through 2040, topline)
“Estimates project that data center power demand will increase by a 12% compounded annual growth rate through 2040 as AI workloads increase in scale.”
Behind-the-meter power market: $60 billion (by 2030, topline)
“And so as a result, we see the behind-the-meter market reaching $60 billion by 2030, led obviously by data centers, which we've continued to participate in.”
Power systems annual market opportunity: more than $100 billion (by 2030, topline)
“And when you take that, we look at the annual market opportunity expanding to more than $100 billion by 2030.”
Cordant margin/operating leverage: higher margin backlog; can drive quite a bit of operating leverage (entering 2026, bottomline)
“And then, Cordant, you saw the robust order momentum. We'll enter the year with higher margin backlog, and that business can drive quite a bit of operating leverage.”
PAST (realized)
- Q4 FY2025 — Lorenzo Simonelli: "In power systems, orders increased significantly to $2.5 billion in 2025, including $1 billion tied to data center applications, reflecting accelerating demand and growing customer confidence in our solutions."
- Q4 FY2025 — Lorenzo Simonelli: "2025 marked a milestone year for our NovaLT industrial gas turbines, booking approximately 2 gigawatts of orders across oil and gas, industrial and data center markets."
- Q4 FY2025 — Lorenzo Simonelli: "IET's Cordant solutions sustained robust momentum in 2025, achieving double-digit order growth for the third consecutive year and a 20% increase in software orders."
- Q4 FY2025 — Lorenzo Simonelli: "The awards with KOC and PDO cover the deployment of advanced ESP systems and Leucipa in over 1,000 wells."
- Q4 FY2025 — Lorenzo Simonelli: "Industry estimates suggest that AI infrastructure spending totaled more than $500 billion in 2025 and is expected to approach $1 trillion annually in the late 2020s."
- Q1 FY2026 — Lorenzo Simonelli: "Notably, Cordant’s power-related orders doubled year-over-year, continuing strong momentum from 2025 when power orders rose by more than 80%."
- Q1 FY2026 — Lorenzo Simonelli: "Currently, this technology is actively deployed across approximately 75,000 wells globally, providing digital enablement that significantly differentiates our artificial lift portfolio through improved surveillance, optimization and production performance."
CURRENT (now)
- Q1 FY2026 — Lorenzo Simonelli: "Further highlighting our momentum in energy management, we announced a collaboration with Google Cloud to develop AI-enabled power optimization and sustainability solutions for data center applications."
- Q1 FY2026 — Lorenzo Simonelli: "In IET, we secured several contracts to deploy Cordant Asset Health, including an award for a large U.S. combined cycle power plant, which further illustrates the value of our digital solutions in enhancing efficiency and reliability."
- Q1 FY2026 — Lorenzo Simonelli: "In OFSE, we expanded our Lucida agreement with a large NOC for ESP surveillance and optimization and signed a new multiyear Leucipa contract with Xpand Energy, covering gas wells across the Marcellus, Utica and Haynesville Shale basins."
- Q1 FY2026 — Lorenzo Simonelli: "For power generation, we converted a prior slot reservation agreement into an integrated solution award for a critical infrastructure project in North America... delivering up to 1 gigawatt of reliable power to support growing energy demand from data centers."
- Q1 FY2026 — Lorenzo Simonelli: "Also, our digital solutions, inclusive of iCenter and Cordant remote digital offerings continue to expand, and they increase the opportunities for cross-selling in these areas."
- Q4 FY2025 — Lorenzo Simonelli: "At the same time, digital infrastructure, AI and data centers are adding a new and durable layer of energy demand, reinforcing the need for reliable, scalable and dispatchable power."
- Q4 FY2025 — Lorenzo Simonelli: "Resilient power supply has emerged as a key bottleneck, which creates a significant opportunity for Baker Hughes as data center build-out increases demand for behind-the-meter power solutions, providing speed, reliability and scale."
FORWARD (guidance)
- Q1 FY2026 — Lorenzo Simonelli: "This partnership is a pivotal collaboration that leverages Baker Hughes expertise in power systems and Google Cloud's leadership in advanced AI and data analytics, bringing together the core capabilities of both companies to drive innovation and operational efficiency across the data center market."
- Q1 FY2026 — Lorenzo Simonelli: "the current projections indicate that power demand will double by 2040, driven by factors such as data center and AI compute, digital infrastructure expansion, electrification, including EV adoption..."
- Q1 FY2026 — Lorenzo Simonelli: "we see the behind-the-meter market reaching $60 billion by 2030, led obviously by data centers, which we've continued to participate in."
- Q1 FY2026 — Lorenzo Simonelli: "Our rapidly expanding installed base is going to allow us to really have a synergy potential within that digital space and software platforms as we go forward."
- Q4 FY2025 — Lorenzo Simonelli: "Against this backdrop, we now expect to book approximately $3 billion of data center-related orders between 2025 and 2027."
- Q4 FY2025 — Lorenzo Simonelli: "Estimates project that data center power demand will increase by a 12% compounded annual growth rate through 2040 as AI workloads increase in scale."
- Q4 FY2025 — Lorenzo Simonelli: "And in particular, on AI infrastructure, we expect to see a doubling in the investment and it's going to reach $1 trillion by the end of this decade, which presents a substantial opportunity for Baker Hughes."
- Q4 FY2025 — Ahmed Moghal: "Cordant, you saw the robust order momentum. We'll enter the year with higher margin backlog, and that business can drive quite a bit of operating leverage."
- Q4 FY2025 — Ahmed Moghal: "our Nova slots are effectively full through 2028, which reflects, obviously, that strong and diversified demand you've seen across multiple end markets, including behind-the-meter power applications."
TRACK RECORD — PROMISE vs DELIVERY
70/100 track record too-early 6 calls reviewed
BKR makes few hard, AI-specific numeric commitments; the main ones are GTS digital orders doubling by 2026 and accelerating data-center order capture ($1.5B then ~$3B). Early data-center dollars look credible (~$1B in 2025) but targets are not yet closed, while the GTS digital-doubling KPI and AI ROP project fade from updates without scorecards—overall too early to score delivery, with modest positive signal on AI-driven power demand.
GTS digital orders to double by 2026 (after ~60% growth in 2024; 1,800+ units connected) — promised Q4 FY2024
too-early Later calls highlight Cordant/software growth (e.g., double-digit Cordant orders, +20% software in 2025) but never report GTS digital order growth vs the 2x-by-2026 target; metric effectively dropped from the narrative with ~6 months left in 2026.
$1.5B of data center power-generation orders ahead of the original 3-year timeline — promised Q3 FY2025
partial Reported >$700M YTD through Q3 FY2025 and ~$1B of 2025 power-systems orders tied to data centers in Q4 FY2025—strong progress but below $1.5B with no later call stating the target was achieved.
~$3B of data center-related orders between 2025 and 2027 — promised Q4 FY2025
too-early Raised ambition after ~$1B data-center-linked power orders in 2025; only Q1 FY2026 is in-window (e.g., ~$1GW data-center conversion order)—full 3-year window not elapsed.
Leucipa next-generation AI / AI-driven predictive analytics deployments (Repsol, ENI) — promised Q2 FY2025
too-early Commercial wins cited but no quantified adoption, productivity, or revenue KPIs with a deadline; Q1 FY2026 cites ~75,000 wells on Leucipa as scale, not vs a prior numeric target.
Google Cloud collaboration on AI-enabled power optimization for data centers — promised Q1 FY2026
too-early Partnership announced with no order, revenue, or deployment metrics or milestone date—too new to judge.
AI Rate of Penetration Optimization with AIQ/ADNOC/CORVA (real-time drilling parameter optimization) — promised Q4 FY2024
quietly-dropped Launch/partnership described; no follow-up in later calls with penetration, ROP uplift %, or revenue/time-bound results.
PRICED-IN (REFINED)
HIGH (already in)Est. revisions rising · Fwd P/E 26.2 · EV/Sales 2.3x
AI claim maps to Industrial And Energy Technology, Oilfield Services And Equipment
Price targets show clear upward revision momentum (lastYearAvg 62.7 → lastQuarterAvg 73.4 → lastMonthAvg 74), indicating analysts have already raised the outlook; rating counts are stable-to-slightly softer but do not offset that signal. At 26.2x next-FY EPS and ~2.3x EV/Sales, BKR trades at a rich forward multiple for a mature oilfield services name, so much of the premium is already embedded. AI efficiency and revenue upside would most plausibly flow through Industrial And Energy Technology (digital/industrial tech) and secondarily Oilfield Services And Equipment; rising targets plus stretched valuation together point to AI upside largely priced in.
COVERAGE — ENTHUSIASM TRAJECTORY + CATALYSTS
5Q4 FY20244Q1 FY20254Q2 FY20255Q3 FY20256Q4 FY20257Q1 FY2026
AI enthusiasm across 6 calls — trend ↗ rising
From one AI drilling pilot to Cordant software scale and a Google Cloud AI power partnership, alongside data-center power demand.
RECENT AI CATALYSTS & NEWS
BUSINESS IMPACT - QUALITATIVE MATERIALITY
5/10 qualitative impact moderate medium-term · mixed evidence
Where AI matters: Cordant/Leucipa digital software
Own-business AI is credible via Cordant and Leucipa scale (~75k wells, strong order growth) but lacks disclosed revenue, margin, or productivity dollars; almost all quantified uplift is supplier-side data-center power equipment (~2% FY26 revenue), which the adopter-only lens excludes.
Caveats: Supplier-side DC/power bookings dominate the quantified AI story, not own P&L efficiency; Cordant/Leucipa dollar contribution and margins remain unanchored despite engagement metrics; Long-run risk that third-party or customer-built AI analytics commoditize surveillance/optimization software layers; Google Cloud data-center AI partnership is too early for revenue or deployment proof
AI DISRUPTION / CANNIBALIZATION RISK tailwind · 2/10
Core value is physical turbines, ESPs, compression, and long-cycle aftermarket, not billable-hour arbitrage; AI expands datacenter power demand and reinforces BKR's digital attach rather than automating away the primary equipment-and-field-services model.
OPTIONS / MARKET STRUCTURE
option liquidity: good
proxy inputs — dollar-ADV $605M · beta 0.97 · px $64.54
source: proxy (no options chain on FMP)
FMP /stable/ exposes no options-chain endpoint on this key, so ATM IV, bid-ask spread and open interest are unavailable. Liquidity below is a PROXY from dollar-ADV, beta and price level (a stand-in for option depth), not measured option-market data.
CONFIRMATION — INSIDERS · 13F · LANGUAGE
Mixed — insiders selling, institutions adding, management language 3/10 hedged.
INSIDERS selling 12 open-market sell(s) vs 0 buy(s) — net distribution
INSTITUTIONS (13F) adding as of 2026-03-31: 223 new / 96 closed positions; 661 increased / 338 reduced; institutional ownership -4.38pp; +126 net 13F holders
MGMT LANGUAGE 3/10 hedged Thin AI section; one develop-stage Google Cloud deal, no AI revenue or rollout metrics.
hedge “we announced a collaboration with Google Cloud to develop AI-enabled power optimization and sustainability solutions”
hedge “leverages Baker Hughes expertise in power systems and Google Cloud's leadership in advanced AI and data analytics”
hedge “bringing together the core capabilities of both companies to drive innovation and operational efficiency”
VERBATIM AI QUOTES
“Further highlighting our momentum in energy management, we announced a collaboration with Google Cloud to develop AI-enabled power optimization and sustainability solutions for data center applications.”
— Lorenzo Simonelli, Q1 FY2026
“This partnership is a pivotal collaboration that leverages Baker Hughes expertise in power systems and Google Cloud's leadership in advanced AI and data analytics, bringing together the core capabilities of both companies to drive innovation and operational efficiency across the data center market.”
— Lorenzo Simonelli, Q1 FY2026
“This contract includes NovaLT16 gas turbines, BRUSH Power Generation electric generators, gears and long-term aftermarket services, delivering up to 1 gigawatt of reliable power to support growing energy demand from data centers.”
— Lorenzo Simonelli, Q1 FY2026
“When paired with Boom's gas turbines, this is expected to deliver a total of 1.21 gigawatts of generator capacity for data centers.”
— Lorenzo Simonelli, Q1 FY2026
“In IET, we secured several contracts to deploy Cordant Asset Health, including an award for a large U.S. combined cycle power plant, which further illustrates the value of our digital solutions in enhancing efficiency and reliability.”
— Lorenzo Simonelli, Q1 FY2026
“Notably, Cordant’s power-related orders doubled year-over-year, continuing strong momentum from 2025 when power orders rose by more than 80%.”
— Lorenzo Simonelli, Q1 FY2026
“In OFSE, we expanded our Lucida agreement with a large NOC for ESP surveillance and optimization and signed a new multiyear Leucipa contract with Xpand Energy, covering gas wells across the Marcellus, Utica and Haynesville Shale basins.”
— Lorenzo Simonelli, Q1 FY2026
“Currently, this technology is actively deployed across approximately 75,000 wells globally, providing digital enablement that significantly differentiates our artificial lift portfolio through improved surveillance, optimization and production performance.”
— Lorenzo Simonelli, Q1 FY2026
“And it's important to remember, we're only in the early stages and the current projections indicate that power demand will double by 2040, driven by factors such as data center and AI compute, digital infrastructure expansion, electrification, including EV adoption and the transition of industrial processes from fuel-based to electric power solutions and what we said before as well from the energy security aspect and making sure that there's redundancy.”
— Lorenzo Simonelli, Q1 FY2026
“And so as a result, we see the behind-the-meter market reaching $60 billion by 2030, led obviously by data centers, which we've continued to participate in.”
— Lorenzo Simonelli, Q1 FY2026
“Also, our digital solutions, inclusive of iCenter and Cordant remote digital offerings continue to expand, and they increase the opportunities for cross-selling in these areas.”
— Lorenzo Simonelli, Q1 FY2026
“And if you look at the Cordant power-related orders, they doubled year-over-year in first quarter and sustaining their strong momentum from 2025.”
— Lorenzo Simonelli, Q1 FY2026
“And we saw power orders increase over 80%, which, again, we see as strong momentum going forward.”
— Lorenzo Simonelli, Q1 FY2026
“We anticipate modestly stronger year-over-year GDP growth in 2026, supported by continued investment in generative AI, easing inflation and a supportive fiscal backdrop in several major economies.”
— Lorenzo Simonelli, Q4 FY2025
“At the same time, digital infrastructure, AI and data centers are adding a new and durable layer of energy demand, reinforcing the need for reliable, scalable and dispatchable power.”
— Lorenzo Simonelli, Q4 FY2025
“Industry estimates suggest that AI infrastructure spending totaled more than $500 billion in 2025 and is expected to approach $1 trillion annually in the late 2020s.”
— Lorenzo Simonelli, Q4 FY2025
“Resilient power supply has emerged as a key bottleneck, which creates a significant opportunity for Baker Hughes as data center build-out increases demand for behind-the-meter power solutions, providing speed, reliability and scale.”
— Lorenzo Simonelli, Q4 FY2025
“Against this backdrop, we now expect to book approximately $3 billion of data center-related orders between 2025 and 2027.”
— Lorenzo Simonelli, Q4 FY2025
“First, digitization (sic) [ digitalization ] and AI-driven compute are fundamentally reshaping power demand.”
— Lorenzo Simonelli, Q4 FY2025
“Estimates project that data center power demand will increase by a 12% compounded annual growth rate through 2040 as AI workloads increase in scale.”
— Lorenzo Simonelli, Q4 FY2025
“In power systems, orders increased significantly to $2.5 billion in 2025, including $1 billion tied to data center applications, reflecting accelerating demand and growing customer confidence in our solutions.”
— Lorenzo Simonelli, Q4 FY2025
“2025 marked a milestone year for our NovaLT industrial gas turbines, booking approximately 2 gigawatts of orders across oil and gas, industrial and data center markets.”
— Lorenzo Simonelli, Q4 FY2025
“IET's Cordant solutions sustained robust momentum in 2025, achieving double-digit order growth for the third consecutive year and a 20% increase in software orders.”
— Lorenzo Simonelli, Q4 FY2025
“Our controls, power electronics and digital platforms, including Cordant, enable real-time optimization, emissions monitoring and system-level reliability that enhance our power systems value proposition to customers.”
— Lorenzo Simonelli, Q4 FY2025
“These solutions directly lower operating costs and support recurring, production-led spending for our customers.”
— Lorenzo Simonelli, Q4 FY2025
“The awards with KOC and PDO cover the deployment of advanced ESP systems and Leucipa in over 1,000 wells.”
— Lorenzo Simonelli, Q4 FY2025
“The ADNOC contract includes the deployment of our AccessESP system in the offshore Umm Shaif Field, along with continuous digital monitoring services that support recurring revenue over the life of these assets.”
— Lorenzo Simonelli, Q4 FY2025
“And in particular, on AI infrastructure, we expect to see a doubling in the investment and it's going to reach $1 trillion by the end of this decade, which presents a substantial opportunity for Baker Hughes.”
— Lorenzo Simonelli, Q4 FY2025
“And in 2025, power systems orders totaled $2.5 billion with $1 billion directly linked to data center applications.”
— Lorenzo Simonelli, Q4 FY2025
“So you look at also what we laid out, we now see data center orders to total $3 billion between 2025 and 2027.”
— Lorenzo Simonelli, Q4 FY2025
“And then, Cordant, you saw the robust order momentum. We'll enter the year with higher margin backlog, and that business can drive quite a bit of operating leverage.”
— Ahmed Moghal, Q4 FY2025
ANALYST QUESTIONS ON AI
Q (Q1 FY2026, David Anderson (Barclays)): Could you spend more time on Power Solutions orders across generation, grid and management, how those drivers play out, and comment on the longer-term stability of data center demand?
A: Lorenzo Simonelli: global power demand is in a multiyear growth cycle in early stages; power demand will double by 2040 driven by factors such as data center and AI compute; behind-the-meter market reaching $60 billion by 2030 led by data centers; Power Systems booked $1.4B of orders in Q1 across generation, grid stability and energy management; digital solutions including iCenter and Cordant continue to expand with Cordant power-related orders doubling year-over-year; confident in durability of data center/power demand.
Q (Q1 FY2026, Saurabh Pant (Bank of America)): Are you capacity constrained relative to demand, including for NovaLT, BRUSH generators and synchronous condensers, given strong data-center-driven demand?
A: Lorenzo Simonelli: power demand is rising with data center growth driving robust demand; NovaLT effectively sold out through 2028; added BRUSH generator and synchronous condenser capacity; actively assessing capacity needs across the entire Power Systems portfolio and will expand beyond current doubling plan if warranted.
Q (Q4 FY2025, Arun Jayaram (JPMorgan)): Can you elaborate on strategy for enhancing power systems capabilities and sustaining growth, given $2.5B of power systems orders in 2025?
A: Lorenzo Simonelli: global power demand multiyear growth cycle driven by data centers, digital infrastructure, artificial intelligence and EVs; on AI infrastructure expects investment to double to $1 trillion by end of decade presenting substantial opportunity; $100B annual power systems market by 2030; 2025 power systems orders $2.5B with $1B data center-linked; data center orders expected to total $3B between 2025 and 2027; portfolio spans generation, grid stability, energy management plus Cordant digital and aftermarket.
Q (Q4 FY2025, Scott Gruber (Citi)): Walk through 2026 IET order guide moving pieces and what could drive upside—would it most likely come from power?
A: Lorenzo Simonelli: 2026 outlook reflects broad IET strength; power systems pipeline strong with $2.5B 2025 orders as foundation; 3-year data center order outlook of $3B reflects healthy pipeline; potential upside across portfolio including power.
Q (Q4 FY2025, David Anderson (Barclays)): You've doubled the 3-year data center order target to $3B—does that mean expanded NovaLT capacity, are you sold out for 2027, and is further expansion related to the 1 gigawatt slot reservation?
A: Ahmed Moghal: on track to double Nova capacity by first half of 2027; Nova slots effectively full through 2028 reflecting strong diversified demand including behind-the-meter power; prepared to expand further beyond current doubling based on disciplined supply-demand assessment and return thresholds.