Schneider Electric SE (ADR)
Industrials · Electrical Components & Equipment
Structural: pure-play on the three deepest 2026-30 capex tailwinds - AI data center power (APC UPS + modular prefab + medium-voltage gear), grid modernization (utility switchgear + EcoStruxure software), and building electrification (HVAC controls + EV charging infra).
Roughly $40B annual revenue, ~18% operating margin, and a 30%+ data center exposure that compounds with hyperscaler capex. Competes head-to-head with $ETN and $VRT in datacenter power, with $ABB and $SIE in industrial automation/switchgear, and with $JCI on building systems.
(1) APC + prefab modular DC power is a duopoly with $VRT on UPS - orderbook compounds with $MSFT $META $GOOGL $AMZN capex; (2) medium-voltage switchgear shortage gives 2-3 year visible backlog at premium pricing; (3) software attach (EcoStruxure) lifts blended margin and ARR-like recurring mix; (4) European industrial peer trading 6-8 turns below $ETN/$VRT on EV/EBITDA despite identical end markets - re-rating optionality; (5) Foxconn JV and JCI Asia-Pacific carve-out add inorganic capacity.
PA) - bid/ask drag and FX translation noise; (2) cyclical industrial automation segment (~25% of mix) exposed to European factory weakness; (3) datacenter power is now consensus - multiple expansion mostly done, narrative risk if hyperscaler capex digestion arrives 2027; (4) China exposure (~13% revenue) caps re-rating in risk-off tape; (5) less pure-play than $VRT - diluted by lower-growth building/industrial legacy.
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