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Eaton vs. Vertiv: Which Data Center Power Stock Has an Edge?
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Key Takeaways
Vertiv has an edge over Eaton, backed by stronger growth estimates and positive analyst sentiment.
Vertiv expects 2026 sales of $14B, adjusted EPS of $6.70 and free cash flow of $2.5B.
Eaton is investing over $1B in capacity expansion as data center demand strengthens.
Artificial intelligence (AI) is driving expansion of data centers, bringing cooling and power infrastructure into sharper focus. This is creating opportunities for companies that supply the infrastructure behind modern data centers. Companies such as Eaton Corporation (ETN - Free Report) and Vertiv (VRT - Free Report) stand tall in this backdrop.
Eaton is a global leader in power management and electrical systems, while Vertiv is a leading global provider of critical digital infrastructure and services for data centers, communication networks, and commercial and industrial environments.
With innovative product portfolios, recurring revenue streams and strong exposure to digital transformation trends, both companies are well-positioned to benefit.
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 positioned to benefit from grid modernization, data-center expansion, industrial automation, the energy transition and an aerospace recovery. Its growing backlog underscores strong demand and the importance of its power-management solutions across critical infrastructure.
Innovation and sustainability underpin Eaton’s strategy. The company plans to invest approximately $3 billion in research and development over the next decade, advancing sustainable technologies, broadening its portfolio and addressing evolving customer needs.
Acquisitions, including Fibrebond, Resilient Power, Ultra PCS and Boyd, strengthen Eaton’s capabilities across electrical infrastructure, aerospace and other priority markets. These additions offer attractive growth prospects and opportunities to enhance margins.
AI-driven data-center development presents a significant opportunity, given these facilities’ substantial power, reliability and efficiency requirements. Eaton’s expanding reach across the electrical power value chain supports its ability to capture this demand. Exposure to utilities, industrial, commercial, residential and aerospace markets further diversifies its revenue base.
Portfolio optimization, productivity improvements and disciplined execution should support operating efficiency and margin expansion. The planned Mobility separation will enable Eaton to allocate more capital toward businesses offering stronger growth and returns.
Meanwhile, Eaton is investing more than $1 billion in capacity expansion and pursuing roughly two dozen Electrical Americas projects. As these facilities ramp up, they should increase production, support higher daily revenues and improve the company’s ability to fulfill sustained customer demand.
Factors to Consider for VRT
Vertiv is well-positioned for sustained growth as expanding AI infrastructure drives demand for power, cooling, services and integrated deployment support. Its broad portfolio enables it to capture spending across these critical areas as AI computing capacity scales. Demand remains strong across the Americas and Asia Pacific, while EMEA has returned to growth with a strengthening pipeline.
The company is expanding its liquid-cooling capabilities through strategic acquisitions. Its April 2026 purchase of Strategic Thermal Labs strengthens its expertise in cold-plate design and server-side liquid cooling for AI workloads. Its collaboration with NVIDIA and the development of 800-volt DC power solutions further reinforce Vertiv’s role in next-generation data center designs.
Vertiv continues to invest in advanced power architectures, thermal systems, services and converged infrastructure as higher-density AI deployments increase infrastructure requirements per megawatt. Its technology roadmap spans traditional AC, medium-voltage AC and 800-volt DC architectures, with customer validation and deployments planned through 2028.
Strong execution is supporting margin expansion and higher cash generation, while a net cash position provides flexibility for continued investment. Management raised its full-year 2026 adjusted operating margin guidance to 23.3%-24.3% and expects pricing gains to outpace inflation, including the impact of current tariffs and countermeasures.
Reflecting this momentum, Vertiv raised its 2026 net sales outlook to $14 billion, representing 37% year-over-year growth. Adjusted EPS is now projected at $6.70, up 60% from 2025, while adjusted operating profit is expected to increase nearly 60%. Adjusted free cash flow is forecast at $2.5 billion.
Price Performance of ETN and VRT
ETN shares have gained 36.7% year to date, while VRT shares have risen 54.8%.
Image Source: Zacks Investment Research
Estimates for ETN and VRT
The Zacks Consensus Estimate for ETN’s 2026 revenues implies a year-over-year increase of 19%, while that for EPS implies a rise of 12.2%. EPS estimates witnessed a 3-cent upward movement in the past 30 days. The expected long-term earnings growth rate is 12.2%.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for VRT’s 2026 revenues implies a year-over-year increase of 36.9%, and that for EPS implies a rise of 59.3%. EPS estimates witnessed a 5-cent upward movement in the past 30 days. The expected long-term earnings growth rate is 36.3%.
Image Source: Zacks Investment Research
Are ETN and VRT Shares Expensive?
Eaton is trading at a forward 12-month price-to-earnings of 28.45X, above the median of 27.25X over the last three years.
Vertiv is trading at a forward 12-month price-to-earnings of 30.1X, below the median of 32.24X over the last three years.
Image Source: Zacks Investment Research
Vertiv shares are more expensive than Eaton’s.
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 meet changing customer requirements better. Additionally, strategic acquisitions are enhancing Eaton’s capabilities, broadening its product offerings and increasing its reach across attractive growth markets.
AI infrastructure demand, integrated capabilities, technology investment, margin execution, and financial flexibility support sustained growth and potential market share gains for Vertiv.
While Vertiv carries a Zacks Rank #2 (Buy) at present, Eaton has a Zacks Rank #3 (Hold). Given positive analyst sentiment and growth estimates, Vertiv, with a VGM Score of A, has an edge over Eaton, which has a VGM Score of D.
View the Zacks #1 Rank List
Image: Bigstock
Eaton vs. Vertiv: Which Data Center Power Stock Has an Edge?
Key Takeaways
Artificial intelligence (AI) is driving expansion of data centers, bringing cooling and power infrastructure into sharper focus. This is creating opportunities for companies that supply the infrastructure behind modern data centers. Companies such as Eaton Corporation (ETN - Free Report) and Vertiv (VRT - Free Report) stand tall in this backdrop.
Eaton is a global leader in power management and electrical systems, while Vertiv is a leading global provider of critical digital infrastructure and services for data centers, communication networks, and commercial and industrial environments.
With innovative product portfolios, recurring revenue streams and strong exposure to digital transformation trends, both companies are well-positioned to benefit.
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 positioned to benefit from grid modernization, data-center expansion, industrial automation, the energy transition and an aerospace recovery. Its growing backlog underscores strong demand and the importance of its power-management solutions across critical infrastructure.
Innovation and sustainability underpin Eaton’s strategy. The company plans to invest approximately $3 billion in research and development over the next decade, advancing sustainable technologies, broadening its portfolio and addressing evolving customer needs.
Acquisitions, including Fibrebond, Resilient Power, Ultra PCS and Boyd, strengthen Eaton’s capabilities across electrical infrastructure, aerospace and other priority markets. These additions offer attractive growth prospects and opportunities to enhance margins.
AI-driven data-center development presents a significant opportunity, given these facilities’ substantial power, reliability and efficiency requirements. Eaton’s expanding reach across the electrical power value chain supports its ability to capture this demand. Exposure to utilities, industrial, commercial, residential and aerospace markets further diversifies its revenue base.
Portfolio optimization, productivity improvements and disciplined execution should support operating efficiency and margin expansion. The planned Mobility separation will enable Eaton to allocate more capital toward businesses offering stronger growth and returns.
Meanwhile, Eaton is investing more than $1 billion in capacity expansion and pursuing roughly two dozen Electrical Americas projects. As these facilities ramp up, they should increase production, support higher daily revenues and improve the company’s ability to fulfill sustained customer demand.
Factors to Consider for VRT
Vertiv is well-positioned for sustained growth as expanding AI infrastructure drives demand for power, cooling, services and integrated deployment support. Its broad portfolio enables it to capture spending across these critical areas as AI computing capacity scales. Demand remains strong across the Americas and Asia Pacific, while EMEA has returned to growth with a strengthening pipeline.
The company is expanding its liquid-cooling capabilities through strategic acquisitions. Its April 2026 purchase of Strategic Thermal Labs strengthens its expertise in cold-plate design and server-side liquid cooling for AI workloads. Its collaboration with NVIDIA and the development of 800-volt DC power solutions further reinforce Vertiv’s role in next-generation data center designs.
Vertiv continues to invest in advanced power architectures, thermal systems, services and converged infrastructure as higher-density AI deployments increase infrastructure requirements per megawatt. Its technology roadmap spans traditional AC, medium-voltage AC and 800-volt DC architectures, with customer validation and deployments planned through 2028.
Strong execution is supporting margin expansion and higher cash generation, while a net cash position provides flexibility for continued investment. Management raised its full-year 2026 adjusted operating margin guidance to 23.3%-24.3% and expects pricing gains to outpace inflation, including the impact of current tariffs and countermeasures.
Reflecting this momentum, Vertiv raised its 2026 net sales outlook to $14 billion, representing 37% year-over-year growth. Adjusted EPS is now projected at $6.70, up 60% from 2025, while adjusted operating profit is expected to increase nearly 60%. Adjusted free cash flow is forecast at $2.5 billion.
Price Performance of ETN and VRT
ETN shares have gained 36.7% year to date, while VRT shares have risen 54.8%.
Image Source: Zacks Investment Research
Estimates for ETN and VRT
The Zacks Consensus Estimate for ETN’s 2026 revenues implies a year-over-year increase of 19%, while that for EPS implies a rise of 12.2%. EPS estimates witnessed a 3-cent upward movement in the past 30 days. The expected long-term earnings growth rate is 12.2%.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for VRT’s 2026 revenues implies a year-over-year increase of 36.9%, and that for EPS implies a rise of 59.3%. EPS estimates witnessed a 5-cent upward movement in the past 30 days. The expected long-term earnings growth rate is 36.3%.
Image Source: Zacks Investment Research
Are ETN and VRT Shares Expensive?
Eaton is trading at a forward 12-month price-to-earnings of 28.45X, above the median of 27.25X over the last three years.
Vertiv is trading at a forward 12-month price-to-earnings of 30.1X, below the median of 32.24X over the last three years.
Image Source: Zacks Investment Research
Vertiv shares are more expensive than Eaton’s.
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 meet changing customer requirements better. Additionally, strategic acquisitions are enhancing Eaton’s capabilities, broadening its product offerings and increasing its reach across attractive growth markets.
AI infrastructure demand, integrated capabilities, technology investment, margin execution, and financial flexibility support sustained growth and potential market share gains for Vertiv.
While Vertiv carries a Zacks Rank #2 (Buy) at present, Eaton has a Zacks Rank #3 (Hold). Given positive analyst sentiment and growth estimates, Vertiv, with a VGM Score of A, has an edge over Eaton, which has a VGM Score of D.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.