Assessing Baker Hughes (BKR) Valuation After New AI Data Center Turbine Contract And Growing Revenue Visibility

Baker Hughes (BKR) is back in focus after Twenty20 Energy awarded the company a contract for 10 Frame 5 gas turbines to power AI driven data centers in Georgia and Texas.

See our latest analysis for Baker Hughes.

The Twenty20 Energy order lands as momentum has been building, with a 30 day share price return of 18.26% and a year to date share price return of 29.83%. The 5 year total shareholder return of 194.77% reflects substantial compounding for long term holders.

If this AI infrastructure contract has caught your attention, it could be a good moment to size up other power related opportunities through our 25 power grid technology and infrastructure stocks.

On one hand, Baker Hughes trades only slightly above the average analyst price target, yet some models suggest a sizeable intrinsic discount. With recent gains already strong, is there still mispricing here, or is the market already factoring in future growth?

Most Popular Narrative: 2.4% Overvalued

With Baker Hughes last closing at $61.20 against a narrative fair value of $59.75, the current setup hinges on how durable its future earnings mix really is.

The company’s strong momentum in securing large-scale service contracts, framework agreements, and technology-driven orders (such as for data centers, LNG, CCS, and recurring gas tech services) is driving an all-time high IET backlog, building strong visibility into future revenue and supporting sustained earnings durability.

Read the complete narrative.

If you want to understand why this narrative still supports a premium, consider how modest revenue growth, steady margins, and a higher future earnings multiple fit together. The tension between slower headline growth and expectations for durable cash generation is where the real story sits.

Result: Fair Value of $59.75 (OVERVALUED)

Have a read of the narrative in full and understand what’s behind the forecasts.

However, you still need to factor in risks such as higher tariff and supply chain costs, or weaker upstream oil and gas spending, which could pressure margins and growth assumptions.

Find out about the key risks to this Baker Hughes narrative.

Another View: Cash Flows Point to a Different Story

While the narrative fair value of $59.75 points to Baker Hughes looking slightly rich at today’s $61.20 share price, our DCF model suggests the stock trades at a 22.6% discount to an estimated future cash flow value of $79.06. Which lens should carry more weight for you?

Look into how the SWS DCF model arrives at its fair value.

BKR Discounted Cash Flow as at Feb 2026

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Baker Hughes for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 53 high quality undervalued stocks. If you save a screener we even alert you when new companies match – so you never miss a potential opportunity.

Build Your Own Baker Hughes Narrative

If you look at the numbers and come to a different conclusion, or simply prefer to test your own view, you can build a custom Baker Hughes thesis in just a few minutes, starting with Do it your way.

A great starting point for your Baker Hughes research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.

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If Baker Hughes is only one piece of your watchlist, do not stop here. Use the Simply Wall Street Screener to surface other opportunities that fit your style before they move without you.

This article by Simply Wall St is general in nature. We provide commentary based on historical data
and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your
financial situation. We aim to bring you long-term focused analysis driven by fundamental data.
Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
Simply Wall St has no position in any stocks mentioned.

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