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FPS Rides on Strength in Data Center Vertical: Will it Drive Revenues?
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Key Takeaways
FPS reported Q2 2026 revenues of $296M, up 69% YoY, led by data center and grid vertical growth.
AI and cloud investments are boosting data center power needs, driving demand for FPS solutions.
FPS benefits from rising electrical content per project and grid constraints fueling infrastructure spend.
Forgent Power Solutions, Inc. (FPS - Free Report) is witnessing solid revenue growth backed by strength in the data center vertical. In the second quarter of 2026, the company reported a revenue of $296 million, up 69% year over year. Market share gains across multiple verticals boosted the top line. However, it is to be noted that the strongest increase was seen in the Data Center and Grid vertical.
There are several growth drivers. The ongoing AI and cloud investment cycle is fundamentally reshaping data center demand, creating a powerful tailwind for FPS. As hyperscalers rapidly expand capacity to support AI workloads, power requirements per data center are rising sharply, driving a step-change in infrastructure spending. This is not limited to building more facilities; each new AI-driven data center requires significantly higher electrical content, including switchgear, transformers and integrated power systems.
At the same time, power availability has emerged as a key constraint, pushing incremental investment into grid interconnections and upstream infrastructure. Since electrical distribution equipment is mission-critical and non-discretionary, this positions FPS to benefit from both higher volume and higher value per project. Combined with its ability to deliver customized, end-to-end power solutions with shorter lead times, FPS is well placed to capture share in what is becoming a multi-year, structurally driven capex cycle.
Per a report from Grand View Research, the AI data center market was valued at $147.28 billion in 2025. The market is projected to grow at 23.9% compound annual growth rate from 2026 to 2033, reaching $810.61 billion. FPS is well-positioned to gain from this market trend.
How Are Competitors Faring?
The company faces competition from Eaton Corporation plc (ETN - Free Report) and Vertiv (VRT - Free Report) . Vertiv continues to benefit from rising power and thermal requirements as data center customers prioritize optimized design, deployment speed and operational efficiency. In the first quarter of 2026, net sales rose 30% year over year to $2.65 billion. It is investing in engineering labs, customer witness testing, and capacity to address higher-density cooling and power architectures.
Eaton’s quarterly revenues were $7.05 billion, which improved 13.1% from the year-ago period. The company operates across the entire electrical power layer of a data center that includes grid input, distribution, backup power and monitoring. Eaton has invested more than $8 billion in transformative portfolio management. Such an initiative will likely bring long-term benefits.
Forgent’s Price Performance, Valuation and Estimates
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FPS Rides on Strength in Data Center Vertical: Will it Drive Revenues?
Key Takeaways
Forgent Power Solutions, Inc. (FPS - Free Report) is witnessing solid revenue growth backed by strength in the data center vertical. In the second quarter of 2026, the company reported a revenue of $296 million, up 69% year over year. Market share gains across multiple verticals boosted the top line. However, it is to be noted that the strongest increase was seen in the Data Center and Grid vertical.
There are several growth drivers. The ongoing AI and cloud investment cycle is fundamentally reshaping data center demand, creating a powerful tailwind for FPS. As hyperscalers rapidly expand capacity to support AI workloads, power requirements per data center are rising sharply, driving a step-change in infrastructure spending. This is not limited to building more facilities; each new AI-driven data center requires significantly higher electrical content, including switchgear, transformers and integrated power systems.
At the same time, power availability has emerged as a key constraint, pushing incremental investment into grid interconnections and upstream infrastructure. Since electrical distribution equipment is mission-critical and non-discretionary, this positions FPS to benefit from both higher volume and higher value per project. Combined with its ability to deliver customized, end-to-end power solutions with shorter lead times, FPS is well placed to capture share in what is becoming a multi-year, structurally driven capex cycle.
Per a report from Grand View Research, the AI data center market was valued at $147.28 billion in 2025. The market is projected to grow at 23.9% compound annual growth rate from 2026 to 2033, reaching $810.61 billion. FPS is well-positioned to gain from this market trend.
How Are Competitors Faring?
The company faces competition from Eaton Corporation plc (ETN - Free Report) and Vertiv (VRT - Free Report) . Vertiv continues to benefit from rising power and thermal requirements as data center customers prioritize optimized design, deployment speed and operational efficiency. In the first quarter of 2026, net sales rose 30% year over year to $2.65 billion. It is investing in engineering labs, customer witness testing, and capacity to address higher-density cooling and power architectures.
Eaton’s quarterly revenues were $7.05 billion, which improved 13.1% from the year-ago period. The company operates across the entire electrical power layer of a data center that includes grid input, distribution, backup power and monitoring. Eaton has invested more than $8 billion in transformative portfolio management. Such an initiative will likely bring long-term benefits.
Forgent’s Price Performance, Valuation and Estimates
Forgent has gained 28.1% over the past year against the Electronics - Miscellaneous Components industry’s decline of 19.8%.
Image Source: Zacks Investment Research
Going by the price/earnings ratio, the company’s shares currently trade at 38.16, higher than 22.08 for the industry.
Image Source: Zacks Investment Research
FPS’ earnings estimates for 2026 and 2027 have increased over the past 30 days.
Image Source: Zacks Investment Research
Forgent currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.