Can AI Data Center Demand Keep Driving nVent Electric's Growth?

Core Insights - nVent Electric is experiencing strong demand from data center customers, primarily driven by growth in artificial intelligence (AI) workloads, with organic orders increasing by approximately 65% in Q3 2025 [1][11] - The company has visibility into 2026, with some programs extending into 2027, indicating firm customer spending plans and a solid backlog that grew in double digits sequentially in Q3 [2] Company Performance - Liquid cooling is a key growth driver, with less than 10% of data centers currently utilizing this technology, but the demand is expected to rise due to new graphics processing unit chips requiring advanced cooling solutions [3] - nVent Electric has over a decade of experience in liquid cooling and has deployed more than 1 gigawatt of cooling capacity [3] - A new facility in Minnesota is set to double the company's liquid cooling production capacity by early 2026 [4] - nVent Electric has joined NVIDIA's partner network, enhancing its visibility among global AI infrastructure customers [4][11] Market Trends - The overall trend in AI infrastructure and liquid cooling demand appears robust, with nVent Electric's backlog and customer pipeline suggesting continued growth in data center demand [5] - The Zacks Consensus Estimate for nVent Electric's total revenues for the full year 2025 is projected at $3.83 billion, reflecting a year-over-year increase of 11.1% [5] Competitive Landscape - nVent Electric competes with companies like Vertiv and Hubbell in the electrical and data center markets [6] - Vertiv is advancing large-scale power architectures for AI workloads and is expected to release new power systems in the second half of 2026 [7] - Hubbell reported high single-digit organic growth in its Electrical Solutions segment, driven by strong demand from data center projects [8] Financial Metrics - nVent Electric's shares have increased by 57.2% year to date, outperforming the Zacks Electronics - Miscellaneous Components industry's growth of 50.7% [9] - The company trades at a forward price-to-sales ratio of 3.99X, which is higher than the industry average of 2.31X [12] - The Zacks Consensus Estimate for nVent Electric's earnings per share (EPS) implies year-over-year growth of 33.7% for 2025 and 19.5% for 2026, with upward revisions in EPS estimates over the past 60 days [13]