If you insist on using the notation where you split the lines to show different versions of the same thing, consider making the second incidence _primed_ to distinguish them as in the following:
\begin{equation} x = BABu \quad \quad \quad (1) \end{equation} or \begin{equation} x = AB^2u \quad \quad \quad (1') \end{equation}
This way you can reference both forms if you need to without ambiguity, but you don't need to increase the equation index.
Also note that matrix multiplication isn't commutative in general, so be careful when writing something like $BABu = AB^2u$ because it isn't always true.