Data Centers Are Running Out of Transformers. Here's the Industrial Stock With a 3-Year Backlog.
Eaton is experiencing unprecedented demand as the AI race continues.
Overview
It's hard to believe one of the biggest bottlenecks in the AI race isn't chip-related. Power transformers are now a rare commodity. Major manufacturers, including Eaton (NYSE: ETN), have backlogs stretching multiple years. Eaton makes the necessary electrical equipment to keep data centers up and running.
The demand far outpacing transformer supply is great news for Eaton and its investors. Orders are far outrunning the ability to ship. In the second quarter of this year, Eaton's sales reached a record $8.5 billion, a 21% jump from the year prior. Adjusted earnings per share were $3.15, also a record for Eaton. Revenue attributed to data centers grew approximately 65%.
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Originally published at www.fool.com.