15 Undervalued Momentum Stocks That Are Taking Off

13. BorgWarner Inc. (NYSE:BWA)

Number of Hedge Fund Holders: 45

On February 12, Deutsche Bank upgraded BorgWarner Inc. (NYSE:BWA) to Buy from Hold and raised its price target substantially from $46 to $82, following the company’s Q4 2025 results. As the reason for the revision, Deutsche Bank believes that BorgWarner is undergoing a “pivotal shift” by entering the AI data center infrastructure market, which could substantially bolster the company’s growth prospects. In its note, Deutsche said:

“BorgWarner’s strategic entrance into the AI data center market, in our view, is a pivotal shift from being a traditional Tier-1 powertrain supplier to a more diversified multi-industrial entity – a move that warrants a valuation re-rate.”

These highly optimistic views followed the company’s February 11 announcement of an agreement with TurboCell, a subsidiary of full-stack data center infrastructure developer Endeavour, to supply a highly modular turbine generator system. The Company expects production to begin in 2027 with a target of 2 GW of initial installed capacity.

According to Deutsche Bank’s estimates, this project could add over $300 million in revenue in 2027. However, the analysts estimate that revenue would be substantially higher than initial estimates if the full 2 GW buildout over the next several years is accounted for.

On a further positive note, margins on this incremental revenue are expected to be in the mid-teens, which should significantly bolster earnings. Deutsche analysts argued:

“The revenue should increment at mid-teens margin to start, suggesting large scale isn’t even necessary for profitability.”

As of February 20, BWA shares are trading 16% below their 52-week high.

BorgWarner Inc. (NYSE:BWA) provides clean and efficient technology solutions for combustion, hybrid, and electric vehicles worldwide. Its products help improve vehicle performance, propulsion efficiency, stability, and air quality.