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(Bloomberg) — Legrand SA boosted its sales guidance as customers continue to invest heavily in artificial intelligence infrastructure.
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The French electrical equipment maker now expects organic sales growth of between 8% and 10% this year, up from 4% to 7% growth earlier, driven by data centers, energy transition solutions and acquisitions.
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Data centers were the key performance driver in the first half, delivering organic growth of more than 30%, Legrand said in a statement. The company made several acquisitions over the period to expand its offering in that market, including a Chinese rack manufacturer and a Malaysian specialist in power protection solutions.
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“Ten years ago we were a small player,” Chief Executive Officer Benoit Coquart said on a call with journalists. “Now we’re present in the totality of the data center market”
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Legrand and its peers — including fellow French company Schneider Electric SE, Switzerland’s ABB Ltd. and US-listed Vertiv Holdings Co. — provide the infrastructure essential to server farms, including electrical equipment and cooling technologies. Their products are in growing demand as hyperscalers pour billions into AI investments.
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Prices for raw materials rose about 4% in the second quarter, including oil derivatives due to the conflict in the Middle East, Coquart said. Growth in the region remained strong, he added, as construction sites were still active in Dubai and Saudi Arabia through the disruptions.
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Legrand’s shares were upgraded to buy earlier this month by Barclays analyst George Featherstone, who said investors are underestimating demand for AI data centers. He expects the market for the relevant electrical equipment, cooling and related services to reach $140 billion in 2028.
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HVAC manufacturer Carrier Global Corp. raised its guidance on Tuesday as it benefited from strong demand for data center cooling solutions. Electrical system supplier GE Vernova Inc. shares dipped when its increased guidance was seen as “relatively modest,” according to Citi analysts, disappointing investors after an impressive rally.
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