Eaton (ETN) Set to Ride AI Data Center Boom, Analysts Reiterate Outperform

Eaton Corporation plc (NYSE:ETN) is one of the Trending AI Stocks on Wall Street. On September 12, BNP Paribas Exane analyst Andrew Buscaglia reiterated an Outperform rating on the stock with a $413.00 price target.

According to the analysts, Oracle’s remarkable backlog demonstrates how big the AI-driven growth opportunity is. A similar surge is anticipated for Eaton in its order backlog as customers spend more on equipment needed to power AI data centers.

“We view Oracle’s backlog, supported by multi-year contracts, as a leading indicator of demand for ETN, and believe it implies a sustained opportunity through 2030 as AI data centers are installed and powered in perpetuity. ETN has underperformed ytd (up ~9% vs S&P 500 up 12%), but we expect valuation to begin to reflect order growth potential in coming quarters. We reiterate our Outperform. Given Oracle’s inflection, we revisited our model and conclude our DC revenue CAGR of >20% through 2030 is achievable. Our Bull Case (35%) is strengthened, while our Bear Case (~11%) seems more unlikely. ETN trades at a P/E of 26x, just a slight premium to peers at 24.5x, although we expect the multiple to re-rate higher as AI-workload DC orders accelerate and backlog inflects.”

Eaton Corporation plc (NYSE:ETN) is a global power management company offering electrical, aerospace, vehicle, and eMobility solutions.

While we acknowledge the risk and potential of ETN as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than ETN and that has 10,000% upside potential, check out our report about this cheapest AI stock.

READ NEXT: 10 AI Stocks You Should Not Ignore and 10 AI Stocks Analysts Say You Should Watch Closely.

Disclosure: None.