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NVT vs. LITE: Which AI Infrastructure Stock Has an Edge Right Now?
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Key Takeaways
NVT expects 2026 data center sales above $2 billion, but $100 million in tariffs may pressure margins.
LITE's pump laser shipments rose over 80% Y/Y, with fourfold growth expected over coming quarters.
LITE's fiscal 2027 revenues are projected to surge 107.3%, outpacing NVT's 41.3% growth estimate.
nVent Electric (NVT - Free Report) and Lumentum Holdings (LITE - Free Report) are both important players in the AI infrastructure industry, but operate in different parts of the technology ecosystem. nVent Electric provides electrical connection, protection and thermal management solutions, supporting critical infrastructure across data centers and industrial applications, while Lumentum Holdings specializes in optical and photonic technologies that enable high-speed data transmission and connectivity.
Both NVT and LITE are well-positioned to benefit from rising investments in AI infrastructure, as hyperscalers expand data center capacity and demand for advanced power, cooling and optical networking solutions continues to grow. However, from an investment point of view, one stock offers a more favorable outlook than the other right now. Let’s break down their fundamentals, growth prospects, market challenges and valuation to determine which stock offers a more compelling investment case.
The Case for NVT Stock
nVent Electric is seeing strong demand from data centers as spending on artificial intelligence (AI) infrastructure continues to rise. NVT expects the infrastructure vertical to post strong double-digit growth in 2026, supported by higher AI-related data center investments. Further, the company expects data center sales to exceed $2 billion in 2026, more than double from 2025 levels.
Growth is coming from liquid cooling, cable management and engineered buildings. NVT is also serving a broad customer base, including hyperscalers, neo-clouds and multi-tenant data centers. The company ended the second quarter with a $2.5 billion backlog, and management sees data center orders remaining strong in the third quarter of 2026.
The growing use of AI is adding another source of demand. Due to rising computing needs, AI data centers require more power, driving investment in power infrastructure. NVT serves utilities directly as well as through distribution partners. The company sees opportunities in engineered buildings and other infrastructure used around data centers as well. This gives the company an opportunity to benefit from higher power demand beyond its direct data center business.
NVT is also adding capacity to meet rising demand. The company expects to spend about $130 million on capital expenditures in 2026, up 40% year over year. Most of the higher investment is going toward capacity for data centers, power utilities and supply-chain resilience. The company opened its Blaine facility in Minnesota earlier in 2026, which effectively doubled its liquid-cooling capacity. Further, management said another expansion is needed and announced the Blaine 2 facility, which is expected to open in the first half of 2027.
However, tariff costs remain a significant near-term risk for nVent Electric as the company expects the impact of tariffs to reach approximately $100 million in 2026, up from its previous estimate of $80 million. In the second quarter, tariffs had a more than $30 million impact, putting pressure on costs as nVent Electric continues to expand production and invest in data center and power utility capacity. While nVent Electric expects to offset these costs through pricing, supply-chain productivity and other operational measures, continued tariff pressure could weigh on margins and profitability if cost increases cannot be fully passed on to customers.
The Case for LITE Stock
Lumentum is seeing higher demand for its optical products as AI workloads increase the need for faster connections between data centers. AI training and inference require more network capacity to move data between sites. This is increasing demand for Lumentum's optical components, including pump lasers and other laser products used in optical networks.
Lumentum's pump laser business is benefiting from this trend. In the fourth quarter of fiscal 2026, pump laser shipments increased more than 80% year over year. Management expects pump laser shipments to increase fourfold over the next several quarters to meet rising demand. The company also said it expects to remain effectively sold out of pump lasers for the foreseeable future, despite expanding production capacity. Management noted that, for one major hyperscaler, the network capacity connecting just two AI data center sites is twice the total global backbone capacity it built over the previous decade.
To support this demand, Lumentum has secured multiple long-term customer agreements to help fund its planned capacity expansion and provide better demand visibility. These agreements generally span three years and, in most cases, include take-or-pay terms. The company is also expanding manufacturing capacity and expects pump laser shipments to grow further as AI networking requirements increase. In the fourth quarter, Lumentum's total revenues rose 109% year over year to $1.01 billion, reflecting growth across its components and systems businesses.
Looking ahead, growing demand for connectivity between AI data centers could provide another source of growth for Lumentum. As of now, the company will need to expand production to meet customer requirements and convert strong demand into shipments. Its ability to increase capacity while maintaining product quality and margins will be important in determining how much it benefits from rising AI networking investments.
NVT vs. LITE: Which Has the Stronger Growth Outlook?
Both companies will benefit from the surging demand for AI data centers, but LITE’s growth profile appears stronger in the long term.
The Zacks Consensus Estimate for LITE’s fiscal 2027 revenues and EPS indicates a year-over-year surge of 107.3% and 146.8%, respectively. For fiscal 2028, top and bottom lines are projected to grow 60.5% and 63.9%, respectively.
Image Source: Zacks Investment Research
In contrast, NVT’s 2026 estimates point to more modest growth, with revenues and EPS indicating a year-over-year increase of 41.3% and 54%, respectively. For 2027, top and bottom lines are both projected to grow 21.1% and 26.6%, respectively.
Image Source: Zacks Investment Research
NVT vs. LITE: Price Performance and Valuation
Year to date, nVent Electric shares have returned 26.7%, while shares of Lumentum have surged 123.3%.
NVT vs. LITE: YTD Price Return Performance
Image Source: Zacks Investment Research
Currently, LITE is trading at a forward sales multiple of 9.92X, higher than NVT’s forward sales multiple of 3.24X. LITE’s higher valuation reflects strong investor confidence in AI-driven datacom demand, putting it above NVT in terms of valuation, reflecting the high growth expectations of the company in the long term.
NVT vs. LITE: Forward 12-Month P/S Ratio
Image Source: Zacks Investment Research
Conclusion: LITE Has an Edge Over NVT
Both nVent Electric and Amphenol are benefiting from higher spending on AI data centers and infrastructure. However, nVent Electric faces higher tariff costs, which could put pressure on margins if the company cannot fully offset these costs through pricing and productivity measures.
In contrast, Lumentum is seeing stronger growth in its optical products business, supported by rising AI-driven datacom demand, higher pump laser shipments and long-term customer agreements. Further, LITE’s valuation reflects high growth expectations, as the company remains well positioned to benefit from rising AI-driven datacom demand over the long term.
Currently, LITE carries a Zacks Rank #3 (Hold), giving the stock a clear edge over NVT, which has a Zacks Rank #4 (Sell).
View the Zacks #1 Rank List
Image: Bigstock
NVT vs. LITE: Which AI Infrastructure Stock Has an Edge Right Now?
Key Takeaways
nVent Electric (NVT - Free Report) and Lumentum Holdings (LITE - Free Report) are both important players in the AI infrastructure industry, but operate in different parts of the technology ecosystem. nVent Electric provides electrical connection, protection and thermal management solutions, supporting critical infrastructure across data centers and industrial applications, while Lumentum Holdings specializes in optical and photonic technologies that enable high-speed data transmission and connectivity.
Both NVT and LITE are well-positioned to benefit from rising investments in AI infrastructure, as hyperscalers expand data center capacity and demand for advanced power, cooling and optical networking solutions continues to grow. However, from an investment point of view, one stock offers a more favorable outlook than the other right now. Let’s break down their fundamentals, growth prospects, market challenges and valuation to determine which stock offers a more compelling investment case.
The Case for NVT Stock
nVent Electric is seeing strong demand from data centers as spending on artificial intelligence (AI) infrastructure continues to rise. NVT expects the infrastructure vertical to post strong double-digit growth in 2026, supported by higher AI-related data center investments. Further, the company expects data center sales to exceed $2 billion in 2026, more than double from 2025 levels.
Growth is coming from liquid cooling, cable management and engineered buildings. NVT is also serving a broad customer base, including hyperscalers, neo-clouds and multi-tenant data centers. The company ended the second quarter with a $2.5 billion backlog, and management sees data center orders remaining strong in the third quarter of 2026.
The growing use of AI is adding another source of demand. Due to rising computing needs, AI data centers require more power, driving investment in power infrastructure. NVT serves utilities directly as well as through distribution partners. The company sees opportunities in engineered buildings and other infrastructure used around data centers as well. This gives the company an opportunity to benefit from higher power demand beyond its direct data center business.
NVT is also adding capacity to meet rising demand. The company expects to spend about $130 million on capital expenditures in 2026, up 40% year over year. Most of the higher investment is going toward capacity for data centers, power utilities and supply-chain resilience. The company opened its Blaine facility in Minnesota earlier in 2026, which effectively doubled its liquid-cooling capacity. Further, management said another expansion is needed and announced the Blaine 2 facility, which is expected to open in the first half of 2027.
However, tariff costs remain a significant near-term risk for nVent Electric as the company expects the impact of tariffs to reach approximately $100 million in 2026, up from its previous estimate of $80 million. In the second quarter, tariffs had a more than $30 million impact, putting pressure on costs as nVent Electric continues to expand production and invest in data center and power utility capacity. While nVent Electric expects to offset these costs through pricing, supply-chain productivity and other operational measures, continued tariff pressure could weigh on margins and profitability if cost increases cannot be fully passed on to customers.
The Case for LITE Stock
Lumentum is seeing higher demand for its optical products as AI workloads increase the need for faster connections between data centers. AI training and inference require more network capacity to move data between sites. This is increasing demand for Lumentum's optical components, including pump lasers and other laser products used in optical networks.
Lumentum's pump laser business is benefiting from this trend. In the fourth quarter of fiscal 2026, pump laser shipments increased more than 80% year over year. Management expects pump laser shipments to increase fourfold over the next several quarters to meet rising demand. The company also said it expects to remain effectively sold out of pump lasers for the foreseeable future, despite expanding production capacity. Management noted that, for one major hyperscaler, the network capacity connecting just two AI data center sites is twice the total global backbone capacity it built over the previous decade.
To support this demand, Lumentum has secured multiple long-term customer agreements to help fund its planned capacity expansion and provide better demand visibility. These agreements generally span three years and, in most cases, include take-or-pay terms. The company is also expanding manufacturing capacity and expects pump laser shipments to grow further as AI networking requirements increase. In the fourth quarter, Lumentum's total revenues rose 109% year over year to $1.01 billion, reflecting growth across its components and systems businesses.
Looking ahead, growing demand for connectivity between AI data centers could provide another source of growth for Lumentum. As of now, the company will need to expand production to meet customer requirements and convert strong demand into shipments. Its ability to increase capacity while maintaining product quality and margins will be important in determining how much it benefits from rising AI networking investments.
NVT vs. LITE: Which Has the Stronger Growth Outlook?
Both companies will benefit from the surging demand for AI data centers, but LITE’s growth profile appears stronger in the long term.
The Zacks Consensus Estimate for LITE’s fiscal 2027 revenues and EPS indicates a year-over-year surge of 107.3% and 146.8%, respectively. For fiscal 2028, top and bottom lines are projected to grow 60.5% and 63.9%, respectively.
Image Source: Zacks Investment Research
In contrast, NVT’s 2026 estimates point to more modest growth, with revenues and EPS indicating a year-over-year increase of 41.3% and 54%, respectively. For 2027, top and bottom lines are both projected to grow 21.1% and 26.6%, respectively.
Image Source: Zacks Investment Research
NVT vs. LITE: Price Performance and Valuation
Year to date, nVent Electric shares have returned 26.7%, while shares of Lumentum have surged 123.3%.
NVT vs. LITE: YTD Price Return Performance
Image Source: Zacks Investment Research
Currently, LITE is trading at a forward sales multiple of 9.92X, higher than NVT’s forward sales multiple of 3.24X. LITE’s higher valuation reflects strong investor confidence in AI-driven datacom demand, putting it above NVT in terms of valuation, reflecting the high growth expectations of the company in the long term.
NVT vs. LITE: Forward 12-Month P/S Ratio
Image Source: Zacks Investment Research
Conclusion: LITE Has an Edge Over NVT
Both nVent Electric and Amphenol are benefiting from higher spending on AI data centers and infrastructure. However, nVent Electric faces higher tariff costs, which could put pressure on margins if the company cannot fully offset these costs through pricing and productivity measures.
In contrast, Lumentum is seeing stronger growth in its optical products business, supported by rising AI-driven datacom demand, higher pump laser shipments and long-term customer agreements. Further, LITE’s valuation reflects high growth expectations, as the company remains well positioned to benefit from rising AI-driven datacom demand over the long term.
Currently, LITE carries a Zacks Rank #3 (Hold), giving the stock a clear edge over NVT, which has a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.