Baker Hughes is pivoting to the future

Baker Hughes BKR US is best known for its weekly rig count data and as an oilfield services company, one of the “big three” US names, alongside SLB and Halliburton. It could be time to think about the business in a different way.

Baker Hughes has two major divisions: Oilfield Services & Equipment, a traditional drilling, completions and production business, and Industrial & Energy Technology (IET), which makes gas turbines, compressors, generators and grid equipment. It’s this area that is pivoting toward powering data centres, which has investors excited right now.

The company doesn’t build data centres itself, instead it makes the gas turbines, generators, synchronous condensers and grid-stability kit that powers them, particularly where utility grid connections are too slow or too congested to keep pace with AI buildout. BKR acquired much of its capabilities here from GE Oil & Gas, which it merged with in 2017.

We have recently seen a run of headline orders for turbines and equipment: a 1.21 gigawatt generator award from Boom Supersonic in February, a Google Cloud tie-up on AI-enabled power optimisation software, and, just last week, a multi-year agreement with Kodiak Gas Services covering an initial 1.0 gigawatt of power equipment with a pathway to 1.8 gigawatts.

BKR has booked $1.0 billion of data centre orders in Q1 2026 alone, matching its performance in the whole of 2025, and is now running ahead of its original three-year order target for the sector.

Baker Hughes is also mid-way through a $13.60 billion acquisition of Chart Industries. A specialist in gas liquefaction, cooling and heat exchange. At the same time, it is selling off its Waygate Technologies inspection business to Hexagon for around $1.45 billion. Deals that will allow it to focus on the energy technology and power sectors,

Performance

BKR has had a strong twelve months, and the stock is up by some +45.00% over the past year. Though it’s been a bumpy ride, the stock touched a 52-week low of $38.37 in July 2025, before rallying to a high point of $70.41 in April 26. The stock price is sensitive to changes in crude oil prices, developments in the Persian Gulf and increasingly, sentiment around the AI trade.

At their current level of $58.00, Baker Hughes has a market cap of $57.10 billion and trades on a trailing P/E of 18.40 times and a forward P/E of around 23.7x (based on estimates for the next twelve months). It pays a quarterly dividend of $0.23 per share, giving a yield of around +1.60%.

Baker Hughes will report earnings on July 26 after the market closes.

Pros:

it has a genuine, order-backed foothold in AI data centre power, with gigawatt-scale contracts already on its books. BKR remains a diversified business with a large, cash-generative oilfield services operation. It is simplifying its portfolio and sharpening its energy-technology focus.15 out of the 21 analysts that research the stock rate it “Strong Buy” with a consensus price target 25.0% ahead of the current share price. Rival GE Vernova GEV US announced last week that its turbine business is sold out until 2030.

Cons:

Oilfield services remain exposed to a soft/volatile oil price backdrop, slowing rig counts, and Middle East politics. Data centre orders are still only a small slice of a roughly $27.0/28.0 billion annual revenue; as such, the “growth story” is running ahead of the numbers. BKR is not cheap on a forward PE basis; indeed, it trades well ahead of rivals Haliburton HLB US, which are at 14.55 times. The premium rating is dependent on the AI story playing out.

Technical outlook

From a technical standpoint, it’s all about potential. The recent rally off the lows around $52.17 is encouraging and has taken the stock above its 10-day MA line, which itself is now turning higher.
The stock is within a whisker of filling a gap from late June, and a print above $58.22 would seal it.

From there, we would look for a move to and through $60.00/$60.30, and then for the 50 D MA line, circa $62.15, with the one-month high at just above at $62.77. Thereafter, $64.30, $64.97 and $67.92 are near term upside targets. The RSI 14 reading is below 50, so it’s nowhere near overbought territory.

Fundamental outlook

As was noted above, BKR trades on a premium PE ratio compared to its peers. The reason for the premium is, of course, the energy technology business and the potential it has to access the huge demand in data centre buildout. The stock has returned just under +180.0% over the last 5 years, and in that time, earnings have grown by +340.70%. Operating cash flow has grown too and was up by +14.25% in 2025, and encouraginglyassets are growing faster than liabilities. Of course, the $13.0 bln acquisition of Chart Industries will affect these and other metrics, and with that in mind, investors should think about the businesses Baker Hughes is becoming, rather than the business it was. The upcoming earnings release should also be viewed in that light.