Is Eaton (ETN) The Best Pick-and-Shovel AI Stock?

We just covered the 10 Best Pick and Shovel AI Stocks to Buy for the Long Term. Eaton Corp (NYSE:ETN) ranks #8 (see 5 Best Pick and Shovel AI Stocks to Buy for the Long Term).

Short Interest: 2%

Eaton Corp (NYSE:ETN) is one of the key beneficiaries of the surge in power demand and the electrification wave that is accelerating after the AI revolution. Eaton is a top AI pick-and-shovel name because it sells the electrical infrastructure and power management systems required to run AI data centers. AI is driving a sharp increase in electricity demand, with the International Energy Agency (IEA) estimating that electricity consumption from data centers could roughly double by 2030.

Eaton provides key products such as switchgear, power distribution units, circuit protection systems, and backup power solutions that are essential for hyperscale data centers. The company benefits directly from the global build-out of AI infrastructure because every new AI facility requires large-scale and reliable electrical systems. Its moat is strong because it operates in a highly specialized, safety-critical segment of the power industry with long design and certification cycles, deep relationships with utilities and hyperscalers, and high switching costs once its systems are embedded into data center architecture.

Janus Henderson Forty Fund stated the following regarding Eaton Corporation plc (NYSE:ETN) in its fourth quarter 2025 investor letter:

“We also are constructive on opportunities for power companies that are capitalizing on the rapid expansion of data center capacity to support AI. These include Eaton Corporation plc (NYSE:ETN), another relative detractor for the quarter. Eaton provides energy-efficient power management solutions for data centers and other industries. After strong performance earlier in the year, the stock declined in the fourth quarter as …. (Click Here to Read the Letter in Detail).”

Photo by mitchel-willem-jacob-anneveldt on Unsplash

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: 33 Stocks That Should Double in 3 Years and Cathie Wood 2026 Portfolio: 10 Best Stocks to Buy. 

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