BorgWarner Shifts to Data Center Power Generation
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 8 hours ago
0mins
Should l Buy BWA?
Source: seekingalpha
- New Business Expansion: BorgWarner (BWA) is venturing into data center power generation to offset a slowdown in its core business, targeting $1.5 billion in sales by 2030; however, analysts suggest that achieving even half of this target may be more realistic, impacting future revenue growth.
- Risk Assessment: UBS downgraded BorgWarner's rating from Neutral to Sell, primarily due to execution risks associated with its partnership with TurboCell, especially given TurboCell's status as a startup and BorgWarner's lack of experience in large-scale turbine production, which could complicate project implementation.
- Market Reaction: Despite BorgWarner's shares hitting an all-time high last week following Q4 results and TurboCell news, they have since retreated, spending five consecutive days in the red, indicating market caution regarding its new business model and reflecting investor concerns about future growth.
- Competitive Analysis: The Sell rating on BorgWarner stands out among Wall Street analysts, as Deutsche Bank recently upgraded the stock to Buy, highlighting a divergence in market sentiment regarding its future potential, particularly against the backdrop of underwhelming performance in its core automotive business, necessitating careful evaluation of its growth prospects.
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Analyst Views on BWA
Wall Street analysts forecast BWA stock price to fall
9 Analyst Rating
5 Buy
4 Hold
0 Sell
Moderate Buy
Current: 60.310
Low
49.00
Averages
52.00
High
55.00
Current: 60.310
Low
49.00
Averages
52.00
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 Awards 2025 Indy 500 Trophies to Palou and Ganassi
- Award Ceremony: BorgWarner presented the Championship Driver's Trophy, known as the Baby Borg, to 2025 Indy 500 winner Alex Palou at a ceremony in Phoenix, Arizona, symbolizing his remarkable achievement and solidifying his legacy in motorsport history.
- Team Achievement: Team owner Chip Ganassi received his seventh Championship Team Owner's Trophy, making him the second-winningest team owner in IndyCar history, highlighting his ongoing influence and success in the racing domain.
- Tradition Continuation: The award ceremony not only celebrated Palou's victory but also continued BorgWarner's tradition since 1988, emphasizing the passion, skill, and innovation in motorsports, thereby enhancing the brand's image.
- Future Outlook: Palou aims to continue his winning streak in the upcoming IndyCar Series, striving to become the seventh driver to win back-to-back titles, showcasing the strong competitive edge of him and his team, which indicates significant potential for future success.
See More
BorgWarner Shifts to Data Center Power Generation
- New Business Expansion: BorgWarner (BWA) is venturing into data center power generation to offset a slowdown in its core business, targeting $1.5 billion in sales by 2030; however, analysts suggest that achieving even half of this target may be more realistic, impacting future revenue growth.
- Risk Assessment: UBS downgraded BorgWarner's rating from Neutral to Sell, primarily due to execution risks associated with its partnership with TurboCell, especially given TurboCell's status as a startup and BorgWarner's lack of experience in large-scale turbine production, which could complicate project implementation.
- Market Reaction: Despite BorgWarner's shares hitting an all-time high last week following Q4 results and TurboCell news, they have since retreated, spending five consecutive days in the red, indicating market caution regarding its new business model and reflecting investor concerns about future growth.
- Competitive Analysis: The Sell rating on BorgWarner stands out among Wall Street analysts, as Deutsche Bank recently upgraded the stock to Buy, highlighting a divergence in market sentiment regarding its future potential, particularly against the backdrop of underwhelming performance in its core automotive business, necessitating careful evaluation of its growth prospects.
See More
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- Market Competition Strategy: Ford plans to launch a small electric pickup starting at $30,000 in 2027, aiming to compete against Tesla and rapidly expanding Chinese brands, thereby promoting broader EV adoption.
- Production Efficiency Improvement: The new electric pickup's wiring harness will be over 4,000 feet shorter and 22 pounds lighter than that of the first-generation electric SUV, and combined with new technologies, assembly time will be reduced by 15%, enhancing overall production efficiency.
- Future Development Vision: CEO Jim Farley describes this transformation as a
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- Rating Upgrade: Deutsche Bank upgraded BorgWarner's rating from neutral to buy with a price target of $82, indicating a potential 24% upside from Wednesday's close, with analyst Edison Yu highlighting that the agreement is expected to generate over $300 million in revenue by 2027, showcasing significant revenue potential.
- Long-term Revenue Opportunity: Yu estimates that if BorgWarner fully engages in the deployment, the revenue opportunity could reach $1.5 to $2.0 billion over multiple years, representing a substantial tailwind for growth and reflecting positive market sentiment towards the company's transformation.
- Cautious Market Share Outlook: Morgan Stanley maintained an equal weight rating on BorgWarner but raised its price target from $49 to $60, indicating a potential loss from Wednesday's close; analyst Andrew Percoco cautioned that new technology validation may take years, suggesting a prudent assumption of low single-digit market share.
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- 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
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- Award Ceremony: BorgWarner presented the Championship Driver's Trophy, known as the Baby Borg, to 2025 Indy 500 winner Alex Palou at a ceremony in Phoenix, Arizona, symbolizing his remarkable achievement and solidifying his legacy in motorsport history.
- Team Achievement: Team owner Chip Ganassi received his seventh Championship Team Owner's Trophy, making him the second-winningest team owner in IndyCar history, highlighting his ongoing influence and success in the racing domain.
- Tradition Continuation: The award ceremony not only celebrated Palou's victory but also continued BorgWarner's tradition since 1988, emphasizing the passion, skill, and innovation in motorsports, thereby enhancing the brand's image.
- Future Outlook: Palou aims to continue his winning streak in the upcoming IndyCar Series, striving to become the seventh driver to win back-to-back titles, showcasing the strong competitive edge of him and his team, which indicates significant potential for future success.
See More
BorgWarner Shifts to Data Center Power Generation
- New Business Expansion: BorgWarner (BWA) is venturing into data center power generation to offset a slowdown in its core business, targeting $1.5 billion in sales by 2030; however, analysts suggest that achieving even half of this target may be more realistic, impacting future revenue growth.
- Risk Assessment: UBS downgraded BorgWarner's rating from Neutral to Sell, primarily due to execution risks associated with its partnership with TurboCell, especially given TurboCell's status as a startup and BorgWarner's lack of experience in large-scale turbine production, which could complicate project implementation.
- Market Reaction: Despite BorgWarner's shares hitting an all-time high last week following Q4 results and TurboCell news, they have since retreated, spending five consecutive days in the red, indicating market caution regarding its new business model and reflecting investor concerns about future growth.
- Competitive Analysis: The Sell rating on BorgWarner stands out among Wall Street analysts, as Deutsche Bank recently upgraded the stock to Buy, highlighting a divergence in market sentiment regarding its future potential, particularly against the backdrop of underwhelming performance in its core automotive business, necessitating careful evaluation of its growth prospects.
See More
Ford's $5 Billion Bet on Next-Gen EV Technology
- Electrical Architecture Innovation: Ford's adoption of a 48-volt electrical architecture is expected to enhance production efficiency for its electric pickup by reducing parts by 20% and workstations by 40%, significantly lowering production costs and improving market competitiveness.
- Market Competition Strategy: Ford plans to launch a small electric pickup starting at $30,000 in 2027, aiming to compete against Tesla and rapidly expanding Chinese brands, thereby promoting broader EV adoption.
- Production Efficiency Improvement: The new electric pickup's wiring harness will be over 4,000 feet shorter and 22 pounds lighter than that of the first-generation electric SUV, and combined with new technologies, assembly time will be reduced by 15%, enhancing overall production efficiency.
- Future Development Vision: CEO Jim Farley describes this transformation as a
See More
Ten Large-Cap Stocks Shine Last Week
- Magna International Surge: Magna International (NYSE:MGA) shares rose 26.81% this week after reporting better-than-expected fourth-quarter results and issuing FY26 adjusted EPS guidance above estimates, indicating strong profitability and market confidence.
- Generac Holdings Jump: Generac Holdings (NYSE:GNRC) saw a 22.25% increase this week, driven by robust fourth-quarter financial results, while Barclays analyst Christine Cho maintained an Equal-Weight rating and raised the price target from $186 to $213, reflecting optimism about future growth.
- BorgWarner's Strong Performance: BorgWarner (NYSE:BWA) shares gained 20.15% this week after reporting better-than-expected fourth-quarter results and announcing a master supply agreement with TurboCell, further solidifying its position in the automotive parts market.
- Smurfit WestRock's Recovery: Smurfit WestRock (NYSE:SW) experienced a 16.81% rise this week after releasing fourth-quarter results, with multiple analysts raising their price forecasts, demonstrating market confidence in its future performance.
See More
BorgWarner Partners with TurboCell for AI Data Centers
- Stock Price Upside: Following a more than 22% surge on Wednesday, Wall Street analysts believe BorgWarner's shares still have room to run, primarily driven by a deal with TurboCell to supply turbine generator systems for AI data centers, marking a strategic pivot towards the AI-driven economy.
- Rating Upgrade: Deutsche Bank upgraded BorgWarner's rating from neutral to buy with a price target of $82, indicating a potential 24% upside from Wednesday's close, with analyst Edison Yu highlighting that the agreement is expected to generate over $300 million in revenue by 2027, showcasing significant revenue potential.
- Long-term Revenue Opportunity: Yu estimates that if BorgWarner fully engages in the deployment, the revenue opportunity could reach $1.5 to $2.0 billion over multiple years, representing a substantial tailwind for growth and reflecting positive market sentiment towards the company's transformation.
- Cautious Market Share Outlook: Morgan Stanley maintained an equal weight rating on BorgWarner but raised its price target from $49 to $60, indicating a potential loss from Wednesday's close; analyst Andrew Percoco cautioned that new technology validation may take years, suggesting a prudent assumption of low single-digit market share.
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
