The growing need to feed power-hungry artificial intelligence models could benefit an under-the-radar power management stock, according to Wall Street analysts. Shares of Eaton have rallied more than 41% since the start of 2024 and are up about 103% over the past year. The company creates electrical components and power distribution systems, with exposure to a variety of end markets, including aerospace, automobiles and electric charging.
Last year, Eaton also said that data centers and IT accounted for 14% of revenues. "As expected, the biggest increase is coming from the very strong demand for AI data centers, which is reflected both in our orders and in our negotiation pipeline," said CEO Craig Arnold during an earnings call last month. "Here, orders on a trailing 12-month basis have more than doubled, and our negotiations in the U.S. have increased by more than 4x.