Data center stocks surge with demand

PARAGRAPH 1 --- Data center stocks surged in July, driven by robust demand for infrastructure. Eaton's electrical backlog jumped 48% (YoY), while Caterpillar's Power Generation revenue rose 41% (YoY). GE Vernova's Q1 data-center equipment orders hit $2.4 billion, up 71% organically and surpassing its entire 2025 total. Penguin Solutions' shares spiked due to higher memory prices, and Digital Realty, Equinix, and other data center REITs gained analyst favor.

PARAGRAPH 2 --- The data center boom is benefiting a broad range of companies. Suppliers of electrical equipment, power management systems, and memory chips are experiencing increased demand. Data center REITs, which lease space to tech companies, are also seeing strong performance. The demand shift towards AI and cloud infrastructure is driving this trend, with companies like Astera Labs, Vertiv, and CoreWeave reporting robust growth.

PARAGRAPH 3 --- Next, watch for Q2 earnings from Eaton (July 26), Caterpillar (July 27), and Digital Realty (Aug 2). These reports will provide insights into the current quarter's demand trends. Additionally, monitor semiconductor earnings in late July and early August, as they could indicate further growth in data center demand.