Bank of America sees growth potential in power company tied to Anthropic IPO

Bank of America just upgraded ERock Inc. to Buy, betting that one of the newest publicly traded power companies is perfectly positioned to ride the AI electricity wave. The catalyst: a massive equipment deal with Anthropic, whose own IPO later this year could pour even more fuel on ERock’s growth story.

The upgrade, issued on July 17, moved ERock (NYSE: EROC) from Neutral to Buy with a $16 price target. That might sound modest for a company that priced its own IPO at $21.50 per share back in June, but context matters. ERock’s stock has been volatile since going public, and the new rating reflects BofA’s conviction that the company’s trajectory is about to shift meaningfully upward.

The Anthropic deal changes the math

At the center of the upgrade is ERock’s largest contract to date: a roughly 470-megawatt onsite power equipment order from Anthropic. The contract pushed ERock’s total contracted backlog to approximately $1.7 billion. That’s a substantial figure for a company that only went public weeks ago and is projecting 2026 revenue in the range of $435 million to $465 million.

Investors noticed. ERock’s stock surged as much as 23% on the news.

ERock’s business model centers on natural-gas generators designed for immediate onsite power needs. Traditional utilities are struggling to keep up with the pace of data center construction, and companies like ERock are stepping into the gap with solutions that can be deployed faster than new grid infrastructure can be built.

Anthropic’s IPO looms large

The other half of the bull case involves Anthropic itself. The AI company, maker of the Claude family of models, is reportedly targeting an IPO in October 2026. Prior valuations have reached as high as $965 billion, with some projections discussing potential targets of up to $2 trillion.

For ERock, a successful Anthropic IPO matters for two reasons. First, it validates the customer behind ERock’s biggest contract. A publicly traded Anthropic with a multi-hundred-billion-dollar market cap is a more creditworthy counterparty than a private startup, no matter how well-funded. Second, the IPO would likely unlock additional capital for Anthropic to accelerate its infrastructure buildout, which means more potential orders for power equipment providers.

The bigger picture for AI power demand

ERock raised approximately $600 million in its June 2026 IPO, giving it the capital to scale manufacturing and deployment. The company’s focus on natural-gas generators positions it as a near-term solution provider. Natural gas isn’t the long-term answer for companies with net-zero commitments, but it’s the answer for companies that need power now and can’t wait for renewable capacity to catch up.

For investors evaluating ERock at current levels, the risk-reward calculus hinges on execution. The company has the backlog, with $1.7 billion in contracted orders providing solid revenue visibility. It has a marquee customer in Anthropic. The risks are equally real: ERock is still a newly public company with limited trading history, and the $16 price target from BofA sits below the IPO price of $21.50, suggesting the bank sees upside from current trading levels but not necessarily a return to day-one enthusiasm.

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