By Al Root
Shares of electrical infrastructure provider Eaton rose early Monday after a Wall Street analyst weighed in on its strategy to cool power-hungry AI data centers.
Eaton stock was up 2.7% a $365.09 in early trading, while the S&P 500 and Dow Jones Industrial Average were up 1% and 0.7%, respectively.
The move came after Jefferies analyst Stephen Volkmann reinstated his Buy rating on Eaton stock on Sunday. His price target is $430 a share.
The reinstatement comes after a period without a rating. Wall Street brokers occasionally suspend ratings when portions of their business are working with a company, perhaps to raise capital.
The change comes after Eaton completed its acquisition of Boyd Thermal earlier in March. Eaton hopes the deal will "boost Eaton's leadership position as an end-to-end solution provider to data center customers around the world," according to a news release.
Key to that is Boyd's liquid cooling technology. AI data centers run hot, and the latest generation of processors and servers needs more than just a fan blowing to keep them cool and operational. The state of the art is water cooling, either via a cold plate or immersion of the chips directly in a liquid.
With hyperscalers Meta Platforms, Microsoft, Alphabet, and Amazon.com spending hundreds of billions on AI data centers, cooling has become a growth business.
(Eaton peer Schneider Electric bought Motivair in early 2025 for a similar reason.)
"The completion of the Boyd Thermal acquisition enhances Eaton's data center offering with a suite of thermal management and engineered products that include Coolant Distribution Units (CDUs), chillers, cold plates, and heat exchangers," wrote Volkmann. Boyd has "an expected revenue stream of $1.7 billion for 2026, nearly 90% data center derived."
Eaton's total 2026 sales are expected to be $30.3 billion, up 11% compared with 2025. Boyd is a small share of that total now, but it will grow in the future.
With the new Buy, 75% of analysts covering Eaton stock rate shares Buy, according to FactSet. The average Buy-rating ratio for stocks in the S&P 500 typically ranges from 55% to 60%. The average analyst price target for Eaton stock is about $413.
Coming into Monday trading, Eaton's stock was up 12% year to date and up 21% over the past 12 months.
Write to Al Root at allen.root@dowjones.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
March 16, 2026 10:40 ET (14:40 GMT)
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