Rising investments in automation, artificial intelligence, industrial software, robotics and digital infrastructure are driving industrial tech stocks like Eaton Corporation (ETN Quick QuoteETN - Free Report) and Rockwell Automation (ROK Quick QuoteROK - Free Report) .

Eaton is a diversified power management company and a global technology leader in electrical components and systems, while Rockwell Automation is the world’s largest company dedicated to industrial automation and digital transformation. 

Expanding demand for electrification, data centers and advanced manufacturing is opening up significant new avenues for growth across the industry. As businesses continue to modernize their operations and embrace next-generation technologies, companies with solid recurring revenue models, innovative product offerings and exposure to long-term digital transformation trends are well-positioned to capitalize on these opportunities.

For long-term investors, which stock offers the more compelling opportunity? Let’s take a closer look at both companies' fundamentals.

Factors to Consider for ETN

Eaton is well-positioned to benefit from several long-term growth drivers, including grid modernization, data center expansion, industrial automation, energy transition, and the recovery of aerospace markets. Its strong and growing backlog reflects healthy customer demand and underscores the company's ability to provide mission-critical power management solutions across diverse end markets.

The company has articulated a clear growth strategy focused on innovation and sustainability. Over the next decade, Eaton plans to invest approximately $3 billion in research and development to create advanced, energy-efficient technologies and sustainable solutions. These investments are intended to address evolving customer needs, strengthen existing product offerings and reinforce the company’s competitive position across global markets.

Eaton is also expanding its growth platform through strategic acquisitions. During the first quarter, the company completed nearly $11 billion in acquisitions aimed at increasing its presence in attractive, high-growth and high-margin markets. These transactions are expected to enhance Eaton’s long-term earnings potential and support sustained value creation.

The rapid growth of AI-driven data centers presents a significant opportunity for Eaton, as these facilities require substantially greater power capacity and energy density. The company is expanding its participation across the electrical power value chain while benefiting from strong demand in both data center and utility markets. It is also seeing continued momentum in commercial aerospace and defense. Furthermore, Eaton’s diversified exposure across commercial, industrial, utility, aerospace, and residential markets reduces dependence on any single industry or customer base.

In addition, Eaton remains focused on improving operational performance through productivity initiatives, portfolio optimization and disciplined integration of acquisitions. These efforts, combined with a favorable end-market backdrop and continued investment in innovation, position the company to drive margin expansion, strengthen its competitive advantages and deliver sustainable long-term growth.

Return on equity is 24.72%, ahead of the industry average of 20.35%. ETN has gained 18.2% in the past three months.

Factors to Consider for ROK

Rockwell Automation is poised to benefit from long-term growth drivers such as factory automation, manufacturing reshoring, industrial digitization, and the increasing adoption of smart manufacturing solutions. Its competitive advantage stems from a broad portfolio of automation hardware, software, and services, anchored by the market-leading Allen-Bradley control systems and FactoryTalk software platform.

The company is a key enabler of Industry 4.0, helping manufacturers build connected, intelligent factories where machines, systems, and employees interact seamlessly in real time. Growing investments in Industrial Internet of Things (IIoT), artificial intelligence and advanced analytics are driving demand for Rockwell’s solutions. Strategic alliances with Microsoft, PTC and NVIDIA further strengthen its digital capabilities and expand its reach beyond traditional automation markets.

Rockwell is also benefiting from rising capital investments across attractive end markets, including life sciences, electric vehicles, battery manufacturing, semiconductors, food and beverage, and logistics automation. In addition, government-backed initiatives promoting domestic manufacturing in North America and Europe are supporting demand for modern production facilities and automation technologies.

Management recently increased its fiscal 2026 sales and earnings outlook, reflecting stronger demand, productivity improvements and pricing actions that are expected to offset inflationary and tariff-related pressures. The company has enhanced its software and recurring revenue mix through acquisitions such as Plex, which expanded its cloud-based manufacturing software capabilities, and CUBIC, which strengthened its electrical systems and intelligent motor control offerings. The exit from the underperforming Sensia joint venture has further streamlined the portfolio.

Rockwell’s planned $2 billion investment in manufacturing capacity, digital infrastructure, and workforce development should enhance operational resilience and support future growth. Supported by strong cash generation, expanding software and services revenues, and a disciplined capital allocation strategy that includes dividends and share repurchases, Rockwell remains well-positioned to create long-term shareholder value.

ROK’s return on equity of 37.5% lags the industry average. ROK shares have gained 33.4% in the past three months.

Estimates for ETN and ROK

The Zacks Consensus Estimate for ETN’s 2026 revenues implies a year-over-year increase of 15.8%, while that for EPS implies a year-over-year increase of 10.4%.  EPS estimates witnessed no movement in the past 30 days. The expected long-term earnings growth rate is pegged at 11.7%. The company has a Growth Score of C.
 

Image Source: Zacks Investment Research

The Zacks Consensus Estimate for ROK’s 2026 revenues implies a year-over-year increase of 7.4%, and that for EPS implies a year-over-year increase of 22.2%.  EPS estimates have moved 1% north in the past 30 days. The expected long-term earnings growth rate is pegged at 12%. The company has a Growth Score of B.

Image Source: Zacks Investment Research

Are ETN and ROK Shares Expensive?

Eaton is trading at a forward 12-month price to earnings of 29.28X, above the median of 26.41X over the last three years.

Rockwell is trading at a forward 12-month price to earnings of 33.83X, above the median of 26.45X over the last three years.

Rockwell shares are more expensive than Eaton's.

Image Source: Zacks Investment Research

Conclusion

Eaton continues to deliver strong performance across its core businesses while benefiting from rising demand tied to data center expansion. Focusing on research and development supports innovation, improves its product portfolio, and enables it to better meet changing customer requirements. Additionally, strategic acquisitions are enhancing Eaton’s capabilities, broadening its product offerings, and increasing its reach across attractive growth markets.

Rockwell Automation is seeing steady demand across discrete, hybrid and process markets, supported by its diversified portfolio. The company will benefit from recent wins across diverse end markets, rising recurring revenues, pricing discipline, expanding portfolio of products, growth investments and acquisitions. 
 
Rockwell carries a Zacks Rank #2 (Buy), while Eaton carries a Zacks Rank #3 (Hold). Given positive analyst sentiment and price performance, Rockwell has an edge over Eaton.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.