BofA has raised its forecast for ERock twice this month. It is seen as a bet on Anthropic's IPO.

For the second time since mid-July, Bank of America has raised its price target for shares of ERock, a small U.S. company that manufactures gas-powered power units for data centers. CNBC calls these shares a stock market bet on Anthropic’s IPO. The AI startup recently joined the company’s client list; Meta was previously among its customers.

On August 13, BofA raised its price target for ERock shares from $16 to $19 and reaffirmed its “Buy” rating. This target implies a 21% upside potential.

This is the second upward revision to the forecast in less than a month: On July 6, the Wall Street investment giant began covering the company’s securities, and on July 17, it raised its recommendation from “neutral” to “buy,” maintaining a price target of $16.

The August revision followed ERock’s announcement of a major contract with the AI startup Anthropic. The order for power generation units with a total capacity of 470 MW was largely responsible for the company’s 1,000% increase in its portfolio, bringing it to $1.7 billion. BofA analyst Ross Fowler called the agreement ERock’s third major data center project and noted the addition of yet another “top-tier client.”

Over the next two days, ERock shares soared 39%. In premarket trading on August 14, they rose by about 2.7%.

Development is a key element in building AI infrastructure. According to Fowler, the deal with Anthropic has strengthened his confidence that ERock’s other major potential projects will also be successfully brought to the contract signing stage. BofA took into account only the sale of ERock power units—with delivery scheduled for 2027–2028. Installation, subsequent operation of the generators, and their maintenance must be formalized in separate agreements, so potential revenue from these services is not included in the calculation, the bank’s analyst emphasized.

ERock designs, installs, operates, and maintains power supply systems for customers who cannot wait years to be connected to the power grid—right at their facilities, according to TipRanks. The company’s flagship product is the RockBlock modular unit, which runs on natural gas from underground pipelines.

ERock power units allow data centers to begin operations before they are fully connected to the grid. The company claims to have commissioned systems with a capacity of over 50 MW in a year and a half, whereas traditional power projects take several years. One of ERock’s largest announced projects is a 366-MW facility for Meta’s future data center in El Paso.

ERock went public on June 10 at $21.50 per share, with BofA helping to organize the listing. At the time of the IPO, the company was valued at $5.9 billion, even though its revenue for 2025 was less than $200 million and its net loss reached $59 million. Losses continued into the first half of 2026. The gap between market capitalization and financial results became one of the main causes for investor concern, and by July 17, the stock was trading 53% below its offering price. It was then that Fowler concluded that the growth potential of ERock’s shares had begun to better offset the risks.

The discount also reflects execution risks: ERock must convert its order backlog into operational projects while avoiding delays related to permits, equipment installation, component deliveries, and connections to gas and electrical grids. Furthermore, just three clients accounted for 48% of ERock’s revenue in 2025. A significant portion of the funds raised through the IPO was earmarked for payments to former owners and reorganization-related expenses, rather than for business expansion, TipRanks noted in July.

The market is even more optimistic than BofA. According to S&P Global, the consensus among eight recommendations on ERock shares is “buy,” with an average price target of $22.62, which is 45% higher than the latest closing price.

Anthropic, currently valued at $965 billion, plans to go public in September or early October 2026, according to sources cited by The Wall Street Journal. The company is already meeting with potential investors. “Half a dozen” Anthropic investors told the Financial Times that they expect an IPO in October with a valuation of $2 trillion—higher than that of SpaceX.

This article was AI-translated and verified by a human editor