BorgWarner Enters Data Center Market with Strategic Upgrade
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1h ago
0mins
Should l Buy BWA?
Source: seekingalpha
- Strategic Market Shift: BorgWarner's entry into the AI data center market signifies a pivotal transition from a traditional Tier-1 powertrain supplier to a diversified industrial entity, which is expected to significantly enhance its competitive position in the market.
- New Partnership Agreements: The company has signed a series of new agreements with European and North American OEMs, including its first 48V electro cross differential program and a supply agreement for a turbine generator system, anticipating to control at least two-thirds of the system content, further solidifying its market position.
- Profit Growth Potential: CEO Joseph Fadool expects the turbine generator system to meet the power quality and energy needs of the data center market, opening avenues for further profitable growth, particularly driven by the expansion of AI and cloud computing.
- Target Price Upgrade: Deutsche Bank upgraded BorgWarner's rating from Hold to Buy and raised its target price by 78% to $82, indicating a 24% upside from Wednesday's closing price, reflecting market optimism about its future growth prospects.
Trade with 70% Backtested Accuracy
Stop guessing "Should I Buy BWA?" and start using high-conviction signals backed by rigorous historical data.
Sign up today to access powerful investing tools and make smarter, data-driven decisions.
Analyst Views on BWA
Wall Street analysts forecast BWA stock price to fall over the next 12 months. According to Wall Street analysts, the average 1-year price target for BWA is 51.50 USD with a low forecast of 45.00 USD and a high forecast of 55.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
8 Analyst Rating
5 Buy
3 Hold
0 Sell
Moderate Buy
Current: 66.100
Low
45.00
Averages
51.50
High
55.00
Current: 66.100
Low
45.00
Averages
51.50
High
55.00
About BWA
BorgWarner Inc. is engaged in clean technology solutions for combustion, hybrid and electric vehicles. The Company operates in four segments. The Turbos & Thermal Technologies’ technologies include turbochargers, e-boosters, e-turbos, emissions systems, thermal systems, gasoline ignition technology, smart remote actuators, powertrain sensors, among others. The Drivetrain & Morse Systems segment’s products include control modules, friction and mechanical clutch products for automatic transmissions, torque-management products and rear-wheel drive (RWD) and all-wheel drive (AWD) transfer case systems and coupling systems. The PowerDrive Systems segment’s products include power electronics such as inverters, onboard chargers, DC/DC converters and combination boxes, and others. The Battery & Charging Systems segment’s products include lithium-ion battery systems for electrified bus, truck and off-highway applications and DC fast chargers suitable for all types of electric vehicles.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
BorgWarner Q4 2025 Earnings Call Highlights
- Sales Performance Growth: BorgWarner reported approximately $14.3 billion in net sales for 2025, driven by a 23% increase in light vehicle eProduct sales, showcasing strong performance in key product portfolios and enhancing market competitiveness.
- Profitability Improvement: Despite a 20 basis point tariff headwind, the company expanded its adjusted operating margin by 60 basis points, achieving $427 million in adjusted operating income for Q4, reflecting effective cost management and enhanced profitability.
- New Product Agreement: BorgWarner announced a Master Supply Agreement with TurboCell, expecting over $300 million in sales in the first year of production starting in 2027, marking a strategic expansion into the data center and microgrid markets and opening new avenues for profitable growth.
- Cautious Future Outlook: Projected 2026 sales are expected to range between $14.0 billion and $14.3 billion, with anticipated declines in the battery business; however, the company aims to maintain an adjusted operating margin between 10.7% and 10.9%, demonstrating ongoing focus on profitability.
See More
BorgWarner Enters Data Center Market with Strategic Upgrade
- Strategic Market Shift: BorgWarner's entry into the AI data center market signifies a pivotal transition from a traditional Tier-1 powertrain supplier to a diversified industrial entity, which is expected to significantly enhance its competitive position in the market.
- New Partnership Agreements: The company has signed a series of new agreements with European and North American OEMs, including its first 48V electro cross differential program and a supply agreement for a turbine generator system, anticipating to control at least two-thirds of the system content, further solidifying its market position.
- Profit Growth Potential: CEO Joseph Fadool expects the turbine generator system to meet the power quality and energy needs of the data center market, opening avenues for further profitable growth, particularly driven by the expansion of AI and cloud computing.
- Target Price Upgrade: Deutsche Bank upgraded BorgWarner's rating from Hold to Buy and raised its target price by 78% to $82, indicating a 24% upside from Wednesday's closing price, reflecting market optimism about its future growth prospects.
See More
Major Wall Street Rating Updates
- Apple Siri Upgrade Delay: Evercore ISI reiterates Apple as outperform, suggesting that reports of delays in Siri upgrades are overstated, with expectations for a multi-phase rollout of AI features this year, emphasizing the importance of privacy protection and seamless integration.
- Shopify Attractiveness Upgrade: TD Cowen upgrades Shopify from hold to buy, citing its strong quarterly performance and continued growth momentum as compelling reasons for investors to consider the stock, especially given its recent price decline.
- Fastly's Stellar Performance: William Blair upgrades Fastly from market perform to outperform following impressive earnings, driven by a significant increase in AI traffic contributions, indicating substantial growth potential in this emerging sector.
- MercadoLibre's Improved Competitive Landscape: JPMorgan upgrades MercadoLibre from neutral to overweight, noting a reduction in competitive pressures in the Latin American online marketplace, with expectations for sustained growth in the coming quarters.
See More
Wall Street Analysts Adjust Ratings
- Analyst Rating Changes: Top Wall Street analysts have adjusted their ratings on several companies, reflecting varying market perspectives that could influence investor decisions.
- Overview of Updates: The rating changes include upgrades, downgrades, and new initiations, prompting investors to pay attention to these shifts to stay informed about market dynamics.
- Investor Consideration: Investors considering buying SHOP stock should refer to the latest insights from analysts to make more informed investment decisions, especially amid market volatility.
- Data Source: A complete view of all analyst rating changes can be found on Benzinga's analyst ratings page, ensuring investors have access to the latest information to optimize their investment strategies.
See More
Wall Street Analysts Adjust Ratings
- Analyst Rating Changes: Top Wall Street analysts have adjusted their ratings on several companies, indicating a shift in market sentiment that could influence investor decisions and market trends.
- Upgrades and Downgrades: While specific upgrades and downgrades are not detailed, such changes typically have a direct impact on the stock prices of the affected companies, prompting investors to closely monitor these shifts to optimize their portfolios.
- Market Reaction Expectations: The adjustments in analyst ratings may trigger short-term market volatility, particularly when investor sentiment is sensitive to certain stocks, potentially leading to rapid price increases or decreases.
- Impact on Investor Decisions: As analysts revise their views on stocks, investors may reassess their investment strategies when considering buying or holding these stocks, thereby affecting overall market liquidity.
See More
U.S. Markets Closed with Mixed Results on Wednesday, Driven by Vertiv Holdings' Gains and Unity Software's Decline
- U.S. Stock Market Performance: U.S. stock indexes ended the day mixed, with some indexes showing little change.
- Index Movements: The S&P 500 index finished flat, while the Dow Jones Industrial Average declined by 0.13% and the Nasdaq fell by 0.16%.
See More
BorgWarner Q4 2025 Earnings Call Highlights
- Sales Performance Growth: BorgWarner reported approximately $14.3 billion in net sales for 2025, driven by a 23% increase in light vehicle eProduct sales, showcasing strong performance in key product portfolios and enhancing market competitiveness.
- Profitability Improvement: Despite a 20 basis point tariff headwind, the company expanded its adjusted operating margin by 60 basis points, achieving $427 million in adjusted operating income for Q4, reflecting effective cost management and enhanced profitability.
- New Product Agreement: BorgWarner announced a Master Supply Agreement with TurboCell, expecting over $300 million in sales in the first year of production starting in 2027, marking a strategic expansion into the data center and microgrid markets and opening new avenues for profitable growth.
- Cautious Future Outlook: Projected 2026 sales are expected to range between $14.0 billion and $14.3 billion, with anticipated declines in the battery business; however, the company aims to maintain an adjusted operating margin between 10.7% and 10.9%, demonstrating ongoing focus on profitability.
See More
BorgWarner Enters Data Center Market with Strategic Upgrade
- Strategic Market Shift: BorgWarner's entry into the AI data center market signifies a pivotal transition from a traditional Tier-1 powertrain supplier to a diversified industrial entity, which is expected to significantly enhance its competitive position in the market.
- New Partnership Agreements: The company has signed a series of new agreements with European and North American OEMs, including its first 48V electro cross differential program and a supply agreement for a turbine generator system, anticipating to control at least two-thirds of the system content, further solidifying its market position.
- Profit Growth Potential: CEO Joseph Fadool expects the turbine generator system to meet the power quality and energy needs of the data center market, opening avenues for further profitable growth, particularly driven by the expansion of AI and cloud computing.
- Target Price Upgrade: Deutsche Bank upgraded BorgWarner's rating from Hold to Buy and raised its target price by 78% to $82, indicating a 24% upside from Wednesday's closing price, reflecting market optimism about its future growth prospects.
See More
Major Wall Street Rating Updates
- Apple Siri Upgrade Delay: Evercore ISI reiterates Apple as outperform, suggesting that reports of delays in Siri upgrades are overstated, with expectations for a multi-phase rollout of AI features this year, emphasizing the importance of privacy protection and seamless integration.
- Shopify Attractiveness Upgrade: TD Cowen upgrades Shopify from hold to buy, citing its strong quarterly performance and continued growth momentum as compelling reasons for investors to consider the stock, especially given its recent price decline.
- Fastly's Stellar Performance: William Blair upgrades Fastly from market perform to outperform following impressive earnings, driven by a significant increase in AI traffic contributions, indicating substantial growth potential in this emerging sector.
- MercadoLibre's Improved Competitive Landscape: JPMorgan upgrades MercadoLibre from neutral to overweight, noting a reduction in competitive pressures in the Latin American online marketplace, with expectations for sustained growth in the coming quarters.
See More
Wall Street Analysts Adjust Ratings
- Analyst Rating Changes: Top Wall Street analysts have adjusted their ratings on several companies, reflecting varying market perspectives that could influence investor decisions.
- Overview of Updates: The rating changes include upgrades, downgrades, and new initiations, prompting investors to pay attention to these shifts to stay informed about market dynamics.
- Investor Consideration: Investors considering buying SHOP stock should refer to the latest insights from analysts to make more informed investment decisions, especially amid market volatility.
- Data Source: A complete view of all analyst rating changes can be found on Benzinga's analyst ratings page, ensuring investors have access to the latest information to optimize their investment strategies.
See More
Wall Street Analysts Adjust Ratings
- Analyst Rating Changes: Top Wall Street analysts have adjusted their ratings on several companies, indicating a shift in market sentiment that could influence investor decisions and market trends.
- Upgrades and Downgrades: While specific upgrades and downgrades are not detailed, such changes typically have a direct impact on the stock prices of the affected companies, prompting investors to closely monitor these shifts to optimize their portfolios.
- Market Reaction Expectations: The adjustments in analyst ratings may trigger short-term market volatility, particularly when investor sentiment is sensitive to certain stocks, potentially leading to rapid price increases or decreases.
- Impact on Investor Decisions: As analysts revise their views on stocks, investors may reassess their investment strategies when considering buying or holding these stocks, thereby affecting overall market liquidity.
See More
U.S. Markets Closed with Mixed Results on Wednesday, Driven by Vertiv Holdings' Gains and Unity Software's Decline
- U.S. Stock Market Performance: U.S. stock indexes ended the day mixed, with some indexes showing little change.
- Index Movements: The S&P 500 index finished flat, while the Dow Jones Industrial Average declined by 0.13% and the Nasdaq fell by 0.16%.
See More
