Given Ormat Technologies’ (ORA) rapid growth overall and the blistering expansion of its energy-storage business in particular, along with the relatively low valuation of Ormat stock, growth investors and growth-at-a-reasonable-price investors should consider buying Ormat stock.
What’s more, Google (GOOG) agreed in 2025 to use Ormat’s geothermal energy to power its AI data centers, suggesting Ormat’s revenue from powering such facilities could grow significantly over the long term. Such a development would likely cause Ormat Technologies stock to soar.
Finally, in cooperation with partners, the company is developing new technology that may vastly expand the amount of geothermal energy it can produce. If the initiative proves successful, the Pentagon, which of course has plenty of funds to allocate, could be among its first customers.
Ormat’s Impressive Growth and Its Low Valuation
In the second quarter, the company’s revenue climbed 10.6% versus the same period a year earlier to $258.8 million, while its EBITDA, excluding certain items, rose 6.9% year over year to $143.9 million.
Also noteworthy is that revenue from its energy-storage business soared 195% YOY to $42.8 million. CEO Doron Blachar reported that the energy-storage unit had benefited from “capacity additions, high asset availability and favorable merchant pricing ”
Ormat now expects to generate $1.15 billion to $1.2 billion of revenue for all of 2026, versus its 2025 sales of $985 million.
On the valuation front, Ormat’s Enterprise Value/EBITDA ratio is 16.6 times, well below the S&P 500 average of 18.1 times.
The Google Deal BODE Well for ORMAT’S Longer-Term Outlook
In February, Ormat disclosed that it had signed a deal to provide as much as 150 megawatts of electricity, using its geothermal energy capabilities, to Google data centers in Nevada. The contract will extend “from the first project’s start date to 15 years beyond the final project’s commissioning,” Globe and Mail reported.
If the initiative goes well, Google and other big data-center operators, given the facilities’ huge, rapidly growing appetite for clean electricity, are likely to buy much more power from Ormat in the longer term.
A New Technology That Could Tremendously Boost ORMAT’S Financial Results
Currently, geothermal energy can only be generated from underground areas that naturally contain “hot water or steam.”
Multiple firms, including Ormat, are developing a technology known as enhanced geothermal systems (EGS) that would change this situation by using drills and “hydraulic stimulation.”
EGS could eventually enable firms to generate geothermal energy from many more locations. The EIA reports that the technology may increase America’s geothermal capacity to 90 gigawatts by 2050, versus the current “summer net capacity” of 2.7 gigawatts.
When it comes to developing EGS, Ormat has made progress on multiple fronts, Blachar reported on the company’s Q2 earnings call. However, it still has to overcome multiple “challenges” posed by the technology, including “keeping water in the system, building a facility where fractures connect, and reducing cooling from continuous cold-water injection.”
Still, the Pentagon’s interest in EGS indicates that it may become viable. Specifically, in 2024, the agency selected Sage Geosystems, in which Ormat has invested $25 million, to develop EGS at an Army base in Texas. Sage is also working with Ormat on a pilot EGS initiative.
In April 2025, the War Department chose Ormat’s partner, oilfield-services giant SLB (SLB), “to pursue geothermal (energy) projects for the U.S. Air Force, Navy and Army bases, globally,” SLB reported in that month. SLB noted that its partner, Ormat, would be responsible for furnishing “an end-to-end geothermal solution” if the Pentagon requests such an initiative. Ormat and SLB are also partnering on an ESG pilot project.
Reading between the lines, Ormat is likely to partner with Sage and/or SLB to provide the Pentagon with geothermal energy from EGS if either or both firms obtain contracts from the agency. And given the War Department’s huge global footprint and ample funds, such contracts could be very lucrative for Ormat and quite positive for Ormat Technologies stock.
*This article is intended to be informational only; it is not financial advice.
