By Avi Salzman

Last year, a few oil services companies told investors they could become data center players. This year, a few are actually doing it.

The biggest winner so far is Liberty Energy, whose stock soared 16% to a new all-time high on Thursday after the company said it can provide data center operators with as much as three gigawatts of power -- or as much as three large nuclear reactors -- by 2029.

Liberty says it's figured out how to use equipment that it normally employs in its oil and gas operations for data centers. That includes gas-fired reciprocating engines, which are large internal combustion engines fed by natural gas that can provide on-site power. Data centers are looking to solutions like that because they don't want to wait to connect to the larger electricity grid.

"We are at the forefront of a seismic shift in how data centers and other large loads are sourcing power," said CEO Ron Gusek.

Liberty was founded by current U.S. Energy Secretary Chris Wright, who was the CEO up until early last year. The company used to live or die based on activity in the shale fields. But the data center opportunity has transfixed investors, who think it can lead to longer-term contracts at favorable pricing. That way the company isn't dependent on the boom-bust oil cycle.

Right now, the shale industry is closer to bust than boom. Shale-drilling is starting to plateau in the U.S., because oil prices have slipped and companies have looked to other countries for growth. Liberty's net income in the fourth quarter fell 73% year over year, and the company expects its revenue and adjusted earnings to drop in the first quarter from fourth quarter levels.

But the data center opportunity is picking up. Liberty has already agreed to develop at least one gigawatt of data center power for a company called Vantage Data Centers. And just last week it signed a preliminary agreement to provide power for a 330-megawatt data center in Texas. "While investors would like to see end-user contracts, the data center developer agreements represent steps forward as the company secures partners who are economically incented to help secure end user contracts," wrote Citi analyst Scott Gruber.

Write to Avi Salzman at avi.salzman@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

January 29, 2026 16:25 ET (21:25 GMT)

Copyright (c) 2026 Dow Jones & Company, Inc.