Answering a caller’s query about Babcock & Wilcox Enterprises, Inc. (NYSE:BW) during the lightning round on August 26, Mad Money host Jim Cramer said:
They’re losing so much money. I thought that things would turn. When we had Kenny on, you’re absolutely right, I got to get him back on… You know, he told a pretty good story, but so far, the story has not panned out, so you have absolutely every reason to say I owe you one, and that’s what we’re going to do.
Cramer’s Babcock & Wilcox View Has Changed
The change in tone is notable because Cramer had spent much of 2026 highlighting Babcock & Wilcox Enterprises, Inc. (NYSE:BW) as a highly speculative way to participate in the growing demand for power generation from artificial intelligence data centers. In January, he said the company was “racking up a lot of new business” and noted that the stock was “highly speculative” and pointed to its losses, debt, and the uncertainty surrounding its ability to deliver on large projects.
By May, however, the investment story appeared to be gaining credibility. Cramer highlighted 44% revenue growth, a roughly 2,000% increase in bookings and a 483% increase in backlog to $2.7 billion. He also pointed to the company’s long history in power-generation equipment and its potential role in meeting the electricity needs of the data-center boom.
Strong Growth Has Not Yet Produced Strong Cash Flow
Babcock & Wilcox Enterprises, Inc. (NYSE:BW) reported second-quarter revenue of $319.7 million, up 130% year over year. Net income swung to $14.3 million from a $58.5 million loss, while adjusted EBITDA rose 57% to $21.8 million. Management raised its 2026 adjusted EBITDA target to $80 million-$105 million. The backlog reached $2.6 billion, up 533%, and the project pipeline exceeded $14 billion. It also redeemed its entire $61.4 million of 6.50% senior notes due 2026 on August 14, reducing near-term debt obligations. It is worth noting that cash generation remains weak. The company generated just $374,000 of operating cash flow in the first half of 2026 on $534.1 million of revenue, with a $100.3 million increase in accounts payable helping offset cash outflows from accounts receivable and other working-capital items.
Bear Case is About Converting Backlog into Profits
The bear case could be about whether Babcock & Wilcox Enterprises, Inc. (NYSE:BW) can execute its large project pipeline at attractive margins while converting growth into cash. Management itself cautions that backlog may not be indicative of future operating results and that contracts can be canceled, modified, or altered. That distinction matters because the company’s $14 billion pipeline contains opportunities that are not yet contracted and may not produce revenue on the expected schedule.
The company’s first-half cash flow makes that risk more tangible. Rapid revenue growth has required substantial working capital, while the business remains dependent on successfully executing large projects. It ended June with $382.8 million of cash, cash equivalents and restricted cash against $239.8 million of secured debt and bonds.
Hedge Funds Are Still Watching, and Short Interest Signals Slight Caution
Insider Monkey tracks over 1,000 elite hedge funds and showed 38 hedge funds held BW at the end of the second quarter, up from 37 in the prior quarter. In Q2, David Swank’s Hood River Capital Management was the biggest hedge fund shareholder with nearly 13.7 million shares. Short interest stood roughly at 12.8% of the float. It suggests that investors remain slightly skeptical that Babcock & Wilcox Enterprises, Inc. (NYSE:BW) can turn its growing backlog and data-center opportunities into sustainable earnings and cash flow. The company now has concrete data-center projects and has improved its near-term debt position, but investors still need to see the backlog translate into profitable execution and cash generation.
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